Section 316 - Public invitations to deposit money with public companies

(1) Despite section 294, an invitation to the public to deposit money with a public company may be made if,

(a) the public company is licensed, under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and Non-Bank Financial Institutions Act, 2008 (Act 774), to carry on banking business; or

(b) before the making of the invitation the written consent of the Commission has been obtained to the making of the invitation and the invitation is made in accordance with the conditions and restrictions that the Registrar has imposed.

(2) The Commission may grant or withhold the consent and without limiting the generality of this subsection, may require the registration with and approval by the Registrar of an advertisement or a circular to be used in connection with the invitation.

(3) Where an advertisement or a circular used in connection with the invitation contains an untrue statement then, subject to subsection (4), a person who made the invitation and a person who was a director of a body corporate making the invitation at the time when the advertisement or circular was published, is liable to pay compensation to the persons who deposited money with the public company on the faith of the advertisement or circular for the loss they may have sustained by reason of the untrue statement.

(4) A person is not liable under subsection (3) if that person proves,

(a) that that person had reasonable grounds to believe and did believe up to the time of publication of the advertisement or circular that the statement was true; or

(b) that the advertisement or circular was published without the knowledge of, and that on becoming aware of its publication, that person forthwith gave reasonable public notice that the advertisement or circular was published without the knowledge of that person.

(5) Where a person deposits money with a public company as a result of an untrue statement of a material fact made, whether innocently or fraudulently in an advertisement or a circular published in connection with an invitation to the public made by or on behalf of that company, that person is entitled to require the company immediately to repay the money with interest at the yearly rate of five per cent, or a higher rate as may have been agreed to be paid on the deposit.