46. Non-cash consideration for Shares in Public Company
(1) A Public Company must not allot Shares as Paid-up (in part or in full) cash unless:
- (a) the Company has obtained an independent valuation of the consideration in accordance with this section not earlier than 6 months before it allots the Shares; and
- (b) a copy of the valuation report has been given to the proposed allottee; and
- (c) copies of the valuation report and the relevant resolutions of the board of Directors have been given to the Registrar along with the notice of the Allotment
(2) A Public Company must not accept, in part or full payment for its Shares or any premium on them, an undertaking given by a Person that the Person or another Person is to undertake work or provide services for the Company or any other Person, unless the work is to be undertaken or the services provided within 5 years after the date of Allotment of the Shares.
(3) Subsections (1) and (2) do not apply to:
- (a) the Allotment of Shares in a Company in connection with a Share exchange; or
- (b) the Allotment of Shares in a Company in connection with a proposed merger with another Body Corporate; or
- (c) the Allotment of Shares in a Company on the conversion of any convertible Securities; or
- (d) the exercise of an option to acquire Shares in a Company; or
- (e) the Allotment of Shares that are fully Paid-up from the reserves of a Company to all Shareholders in proportion to the number of Shares held by each Shareholder; or
- (f) the consolidation and division, or subdivision, of Shares, or any class of Shares, in the Company in proportion to the Shares or the Shares in that class; or
- (g) the Company provided that the number of Shares to be allotted when aggregated with the number of shares allotted for non-cash consideration (otherwise than under the exemptions in subsections (3) (a) to (f)) in the current financial year does not exceed 5% of the total number of the Company's issued Shares (other than Shares held by the Company in treasury) immediately prior to such allotment.
(4) A valuation report required under subsection (1) must be made by a Person registered as an auditor under these Regulations who is not:
- (a) an Employee of the Company; or
- (b) a partner, officer or employee of an Employee of the Company or of a partnership in which an Employee of the Company is a partner; or
- (c) an officer or employee of an associated undertaking of the Company; or
- (d) a partner, officer or employee of an associated undertaking of the Company or of a partnership in which an associated undertaking of the Company is a partner; or
- (e) connected with the Company in a way prescribed under the Rules.
(5) The Person conducting the valuation (the valuer) may request an Employee of the Company to provide the information and explanation that the valuer considers necessary for the valuation. The Employee must comply with the request or take reasonable steps to ensure that the request is complied with.
(6) A Person must not:
- (a) make a statement, or give information, to the valuer (whether orally, in a Document or in any other way) that is false or misleading in a material particular; or
- (b) give a Document to the valuer that is false or misleading in a material particular; or
- (c) conceal information if the concealment is likely to mislead or deceive the valuer.
(7) Contravention of subsection (5) or (6) is punishable by a fine.
(8) For this section:
- (a) an Allotment is in connection with a Share exchange if the consideration for the Allotment is the transfer of Shares in another Body Corporate or the cancellation of Shares in another Body Corporate, and the Allotment is open to all holders (or all of a particular class of holders) of Shares in the other Body Corporate; and
- (b) an Allotment is in connection with a proposed merger of a Company with another Body Corporate, if the Company proposes to acquire all the assets and Liabilities of the other Body Corporate in exchange for the issue of its Shares or other Securities to the shareholders or members of the other Body Corporate.