Section 58 - Prohibited transactions in shares

(1) Except as provided in this Act, a company shall not,

(a) alter the number of its shares or the amount of money remaining payable on those shares;

(b) release a shareholder or former shareholder from a liability on the shares;

(c) provide financial assistance, directly or indirectly, for the subscription or purchase of the shares of the company or the shares of its holding company; or

(d) acquire, by way of purchase or otherwise, any of its issued shares or any shares of its holding company.

(2) For the purposes of paragraph (d) of subsection (1), shares are acquired by the company if they purport to be held in trust for the company although they are registered in the names of nominees.

(3) Subsection (1) does not prohibit a company from voluntarily acquiring its own shares on the conversion of the company to a company limited by guarantee in accordance with section 9.

(4) In the event of a breach of this section,

(a) if the breach is of paragraph (a) or (b) of subsection (1), the purported alteration or release is void and every officer of the company who is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units;

(b) if the breach is of paragraph (c) or (d) of subsection (1), then,

(i) knowledge of the breach, voidable by the company and a payment made by the company in respect of that transaction is immediately repayable with interest at the yearly interest rate applicable to the ninety-one day government treasury bill or a higher rate that the Court may order, and

(ii) whether or not the transaction is avoided, every officer of the company who is in default is liable to pay to the Registrar, an administrative penalty of five hundred penalty units or twice the amount of money of a provision or payment made by the company in respect of the transaction, whichever is the greater.