COMPANIES ACT - 1963 (ACT 179)

    Section - 265 - Control of Public Invitations

    (1) It shall not be lawful for any person to make any invitation to the public,

    (a) to acquire or dispose of any shares or debentures of a company, or

    (b) to deposit money with any company for a fixed period or payable at call, whether bearing or not bearing interest,

    unless the company concerned is a public company and the appropriate provisions contained in Part A of Chapter IV of this Code are duly complied with:

    Provided that nothing in this subsection contained shall render unlawful the sale of any shares or debentures by or under the supervision of the Court.

    (2) If any invitation to the public is made in breach of subsection (1) of this section, all persons making the invitation and every officer of any body corporate making the invitation who is in default shall be liable on conviction in the case of a body corporate to a fine not exceeding one thousand pounds and in any other case to imprisonment for a term not exceeding two years or to a fine not exceeding one thousand pounds or to both such imprisonment and fine.

    (3) If as a result of any invitation to the public in breach of subsection (1) of this section any person acquires or disposes of any shares or debentures or deposits money with any company he shall be entitled to rescind such transaction and either in addition to or instead of rescinding, to recover compensation for any loss sustained by him from any person who is liable, whether convicted or not, in respect of the breach.

    (4) Where, in accordance with subsection (3) of this section, any person claims to rescind any transaction he must do so with reasonable promptitude and shall not be entitled to rescind any transaction with the company or to recover compensation from it unless he takes steps to rescind before the commencement of the winding up of the company, but the fact that it is too late to rescind shall not prejudice his right to recover compensation from any person other than the company.