COMPANIES ACT - 1963 (ACT 179)

    Section - 289 - Public Invitations to Deposit Money with Public Companies

    (1) Notwithstanding section 265 of this Code it shall be lawful to make an invitation to the public to deposit money with a public company if,

    (a) the public company is licensed, under section 24 of the Companies Ordinance (Cap. 193) or any statutory re-enactment thereof, to carry on banking business; or

    (b) prior to the making of the invitation the written consent of the Registrar has been obtained to the making thereof and the invitation is made in accordance with such conditions and restrictions as he has imposed.

    (2) The Registrar may, in his absolute discretion grant or withhold such consent as is referred to in paragraph (b) of subsection (1) of this section and, without prejudice to the generality of the foregoing, may require the registration with and approval by him of any advertisement or circular to be used in connection with the invitation.

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

    (4) No person shall be liable under subsection (3) of this section if he proves,

    (a) that he 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 his knowledge and that on becoming aware of its publication he forthwith gave reasonable public notice that it was published without his knowledge.

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