COMPANIES ACT - 1963 (ACT 179)

    Section - 58 - Financial Assistants for Acquisition of Shares

    Nothing in section 56 of this Code shall be deemed to prohibit any of the following transactions, namely,

    (a) the payment of commission or brokerage to any person in consideration of his subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares in the company provided that the payment of commission or brokerage is authorised by the Regulations and does not exceed ten per centum of the price at which the shares are issued or such lesser rate as may be specified in the Regulations;

    (b) where the lending of money is part of the ordinary business of the company, the lending of money in the ordinary course of business notwithstanding that such money may be used for the subscription or purchase of shares in the company or its holding company;

    (c) the provision by a company in accordance with any scheme for the time being in force of money for the purchase or subscription of shares to be held for the benefit of persons bona fide in the employment of the company or any associated company including any director holding a salaried employment in the company or any associated company;

    (d) the making by a company of loans to persons, other than directors, bona fide in the employment of the company or any associated company with a view to enabling those persons to purchase or subscribe for shares to be held by themselves beneficially and not as nominees for the company or any other person;

    (e) the payment by a company of a lawful dividend on its shares notwithstanding that the dividend received by a shareholder is used to discharge any liability on his shares or to repay money borrowed for the purpose of subscribing or purchasing shares.

    (f) in the case of a public company some or all of whose equity shares are dealt in on an approved stock exchange or in respect of which an application has been made to an approved stock exchange for permission to deal in such shares, the payment of any commissions, fees, costs and expenses and the giving of any indemnities and warranties in each case to a person arranging or otherwise involved in an underwriting, placing or sale of securities in the company or any similar transaction thereto, provided that (i) an application for permission to deal in such securities has been or is to be made to an approved stock exchange and (ii) any such financial assistance is given in good faith in the interests of the company. [As inserted by the Companies Code (Amendment) Act, 1994 (Act 474) s. 1].