Companies - Public Offering Of Securities And Prospectus (Ss 295-329)

Link to law: http://www.elaws.gov.bw/desplaylrpage1.php?id=1314

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now
.highlight_word{
background-color: red;
color:#FFFFFF;
}




295. Definitions

(1) In this Part, unless the context otherwise requires-

"company" includes an external company;

"letter of allocation" means any document conferring a right to subscribe for securities in terms of a rights offer;

"offer" means an offer made in any way, including by provisional allotment or allocation, for the subscription for or sale of any securities and includes an invitation to subscribe for or purchase any securities;

"offer to the public" and any reference to offering securities to the public mean any offer to the public and include an offer of securities to any section of the public, whether selected as shareholders or debenture-holders or employees of the company concerned or as clients of the person issuing the prospectus concerned or in any other manner;

"promoter" in relation to civil and criminal liability in respect of an untrue statement in a prospectus, means a person who was a party to the preparation of the prospectus or of the portion thereof containing the untrue statement but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company or preparing the said prospectus;

"rights offer" means an offer for subscription with a right to renounce in favour of other persons, to those shareholders or debenture holders of a company who are not excluded from such offer under subsection (2), for any securities of that company or any other company, where a stock exchange within Botswana or a stock exchange recognised by the Minister on the recommendation of the committee of the Botswana Stock Exchange for the purposes of this definition by notice in the Gazette, has granted or has agreed to grant a listing for the shares which are the subject of the offer;

"securities" means any shares or debentures or any right or option in respect of any shares or debentures but does not include any securities issued by an investment company or a Collective Investment Undertaking which are regulated by the Collective Investment Undertakings Act;

"untrue statement" in relation to a prospectus or portion thereof, includes-

(a) a statement which is misleading in the form and context in which it is included therein and a statement shall be deemed to be included in a prospectus if it is contained in any report or memorandum which appears on the face of the prospectus or which is by reference incorporated therein or is attached to or accompanies the prospectus on registration; and

(b) an omission from a prospectus of any matter, whether such matter is required to be included therein by this Act or not, where such an omission is calculated to mislead, and such prospectus shall be deemed in respect of such omission to be a prospectus in which an untrue statement is included.

(2) Notwithstanding anything contained in the constitution of a company, the company may, with the written approval of the Registrar and subject to such conditions as he may determine, exclude any category of shareholders or debenture holders of the company not resident within Botswana from any rights offer.

(3) An application for a written approval referred to in subsection (2) shall be accompanied by the prescribed fee.

296. Restrictions as to offers to the public

(1) No person shall offer any securities to the public otherwise than in accordance with the provisions of this Act.

(2) No person shall offer to the public any securities of any company or body corporate which is not a company or external company within the meaning of this Act or which is not or which has not been exempted from the provisions of this subsection by the Registrar by notice in the Gazette.

(3) Any person who contravenes the provisions of subsection (2) and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention shall be guilty of an offence and liable to the penalty set out in section 492(3)

297. Offers not being offers to the public

An offer of shares in relation to an offer for the subscription for or sale of any shares, shall not be construed as an offer to the public-

(a) if the offer is made to-

(i) a bank registered or provisionally registered in terms of the Banking Act,

(ii) an insurer registered or provisionally registered in terms of the Insurance Industry Act,

(iii) a pension fund manager or administrator registered under the Pension Funds Act, or

(iv) any other company which carries on the business of portfolio funds management and is approved for the purposes of this section by the committee of the Botswana Stock Exchange which is acting as principal, and also to a wholly owned subsidiary of such bank, or insurer or other company when it acts as agent in the capacity of authorised portfolio manager for a pension fund approved by the Minister responsible for finance and development planning, or for a Collective Investment Undertaking licensed under the Collective Investment Undertakings Act, managed by the said wholly owned subsidiary which is a management company in terms of the Collective Investment Undertakings Act;

(b) if the offer for subscription is of such a nature that the total acquisition cost of the shares for a single offeree acting as principal is at least P100,000 or such higher amount as the Minister may, by notice in the Gazette, determine in order to counter the effect of inflation;

(c) if it is a single once-off offer for subscription and the offer is accepted by not more than 20 persons acting as principals:

Provided that -

(i) the aggregate subscription price (including any premium) of the shares so issued does not exceed P100,000 or such higher amount as the Minister may, by notice in the Gazette, determine in order to counter the effect of inflation,

(ii) the issue of the shares shall be finalised within six months from the date the offer was first made,

(iii) the offer shall be in writing,

(iv) particulars of the offer shall be lodged in the prescribed manner with the Registrar for registration prior to the offer being made, and

(v) the offer shall not be accompanied by or made by means of an advertisement and no selling expenses shall be incurred in connection with the offer;

(d) if it is a non-renounceable offer for the subscription of shares and the offer is made only to existing shareholders or debenture holders of that company;

(e) if it is a rights offer; or

(f) if the offer is made to any director or officer of the company, or any close relative of such director or officer:

Provided that the original offer shall for purposes of this Part be an offer to the public if the offer is renounceable in favour of a person who is not a director or officer of the company or close relative of such director or officer.

298. Offer or subscription to public without a prospectus prohibited

(1) No person shall make any offer to the public for the subscription for shares unless it is accompanied by a prospectus complying with the requirements of this Act and registered with the Registrar, and no person shall issue such a prospectus which has not been so registered.

(2) Any person who contravenes any provision of subsection (1) and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence, and is liable on conviction to the penalty set out in section 492(3).

299. Approval by stock exchange a requirement for letters of allocation

(1) No person shall issue, distribute or deliver or cause to be issued, distributed or delivered a letter of allocation unless it is accompanied by such documents as are required and have been approved by the stock exchange concerned.

(2) Any person who contravenes any provision of subsection (1) and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence and is liable on conviction to the penalty set out in section 492(3).

300. Offer for sale to the public without prospectus prohibited

(1) No person shall make any offer to the public for the sale of any securities-

(a) which have been, or have been agreed to be, allotted by the company concerned with a view to all or any of them being offered to the public; or

(b) in respect of which it has been made known in any way at or about the time of, and in connection with, such offer, that the company concerned has applied or intends to apply for their listing by a stock exchange in Botswana or elsewhere, unless such offer is accompanied by a prospectus complying with the requirements of this Act and registered with the Registrar, and no person shall issue such a prospectus which has not been so registered.

(2) For the purposes of subsection (1) (a) it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, shares was made with a view of the shares being offered for sale to the public if it is shown that an offer for sale to the public in respect of such shares or any of them was made within 18 months after the allotment or the agreement to allot.

(3) Any person who contravenes any provision of subsection (1) and, if such person is a company, any director or officer of such company who knowingly is a party to the contravention, shall be guilty of an offence, and is liable on conviction to the penalty set out in section 492(3).

301. Rights offers

(1) A company desiring to issue a letter of allocation shall deliver to the Registrar for registration a copy thereof together with the prescribed fee and a copy of every document referred to in section 299 and every such copy shall be certified, by not less than two directors of the company, as a true copy of the original approved by the stock exchange concerned.

(2) Every copy mentioned in subsection (1) shall be accompanied by a copy of any contract referred to in the letter of allocation and, if such contract is not in the English language, by translation of the contract into English.

(3) As soon as the Registrar has registered the documents referred to in subsection (1), he shall give notice of the registration to the company concerned or the person who lodged them with him on behalf of the company.

(4) Every letter of allocation which is issued shall-

(a) state on the face of it that a copy of the letter of allocation together with copies of all other documents referred to in subsections (1) and (2) have been registered as required by this section; and

(b) be accompanied by a copy of every document lodged therewith in terms of subsection (1):

Provided that the provisions of this paragraph shall not apply to any letter of allocation issued in connection with a renunciation of part of the rights to subscribe in terms of the rights offer.

(5) The provisions of sections 304(2) and (3), 306 (1) and (4), 307 (1), (4) and (5), 311, 313, 314, 315, and 316 shall apply mutatis mutandis to the rights offer and all documents issued in connection therewith.

(6) Any person who contravenes any provision of this section, and if such person is a company, any director and officer of such company who knowingly is a party to such contravention, shall be guilty of an offence and liable on conviction to the penalty set out in section 492(2).

302. Application form for shares to be attached to prospectus

(1) No person shall issue, distribute or deliver or cause to be issued, distributed or delivered, any form of application in respect of shares of a company, unless the form-

(a) is attached to a prospectus a copy of which has been registered with the Registrar; and

(b) bears on the face of it the date of registration of the prospectus:

Provided that this subsection shall not apply if it is shown that the form of application was issued either-

(i) in connection with a bona fide invitation to enter into an underwriting agreement with respect to the shares, or

(ii) in relation to shares which were not offered to the public.

(2) If any person contravenes subsection (1) (a) or (b), he shall be guilty of an offence, and is liable on conviction to the penalty set out in section 492(2).

303. Matters to be stated in prospectus

(1) Every prospectus issued in terms of this Act-

(a) shall be in the English language and contain a fair presentation of the state of affairs of the company, the securities of which are being offered and shall state at least the matters specified in, and set out the reports referred to in, Part I and Part II of the Tenth Schedule; and

(b) may state instead of the matters referred to in paragraph (a), at least the matters specified in Part III of the Tenth Schedule, where the intended offer relates to securities which are or are to be in all respects uniform with existing securities previously issued and a stock exchange within Botswana has not in respect of such first-mentioned securities granted or agreed to grant a listing, and such offer is made only to existing shareholders or debenture holders of any company with the right to renounce in favour of other persons.

(2) The information referred to in subsection (1) shall be set out in print or type and shall not be less conspicuous than that in which the additional matter of the prospectus is printed or typed, shall be set out in separate paragraphs under the headings provided in the Tenth Schedule and in accordance with the instructions contained in Part IV of that Schedule.

(3) Every prospectus in respect of an offer for the sale of shares under section 300 (1)(a) shall state, in addition to the matters specified in subsection (1)-

(a) the net amount of the consideration received or to be received by the company in respect of the shares to which the offer relates; and

(b) the place and time at which a contract under which the said shares have been or are to be allotted to the issuer of the prospectus may be inspected.

(4) Every prospectus issued shall state on the face of it that a copy thereof has been registered as required by this Act and shall specify or refer to statements including therein specifying any documents required by section 304 to be endorsed on or attached to or to accompany a prospectus when lodged for registration.

(5) Any person who knowingly is a party to the issue of a prospectus in contravention of any provision of this section, shall be guilty of an offence and shall be liable on conviction to the penalty set out in section 492(2).

304. Consent of person named as director or expert

(1) No person shall be named as a director or proposed director of a company in any prospectus relating to shares of that company unless, at any time prior to the registration of such prospectus-

(a) his written consent, in the prescribed form, to act as such director has been lodged with the company; and

(b) the notice referred to in section 155 providing the relevant particulars in regard to such person, has been delivered to the Registrar.

(2) No prospectus which includes any statement or reference to any statement purporting to be made by an expert, shall be registered by the Registrar unless-

(a) the expert has given, and has not before delivering of a copy of the prospectus for registration to the Registrar, withdrawn his written consent to the issue thereof with the statement or reference included in the form and context in which it is included;

(b) a statement that the expert has given and has not so withdrawn his consent appears in the prospectus; and

(c) such written consent is endorsed on or attached to the copy of the prospectus delivered for registration to the Registrar.

(3) The Registrar shall not register any prospectus which names any person as an auditor, attorney, banker or broker of a company unless it is accompanied by the consent in writing of the person so named to act in the capacity stated and to his name being stated in the prospectus.

305. Contracts and translations thereof to be attached to prospectus

(1) No prospectus shall be registered unless there is attached to it a copy of any material contract required by the Tenth Schedule to be stated in the prospectus or, in the case of such a contract not reduced to writing, a memorandum giving full particulars thereof.

(2) There shall be attached to any such contract as is mentioned in subsection (1)-

(a) if it is in a foreign language, a certified translation thereof into English; or

(b) if it is partly in a foreign language, a copy thereof embodying such a certified translation of so much thereof as is in a foreign language.

306. Where the issue is underwritten

(1) No prospectus containing a statement to the effect that the whole of any portion of the issue of the securities offered to the public, has been or is being underwritten shall be registered until there is delivered to the Registrar a copy of the underwriting contract and a sworn declaration by the person named as underwriter or, if such person is a company, by each of two directors of such company, or if the company only has one director, by that director, that to the best of the deponents knowledge and belief the underwriter is and will be in a position to carry out his obligations even if no securities are applied for.

(2) If an offer of securities is made in respect of which no prospectus is required by this Act, the copy of the contract and sworn declaration referred to in subsection (1) shall be delivered to the Registrar not later than the date of the proposed offer of securities.

(3) If default is made in complying with the provisions of subsection (2), the company, and any person (including a body corporate) and every director or officer of the said company (or body corporate) who knowingly is a party to the contravention, shall be guilty of an offence, and is liable on conviction to the penalty set out in section 491(1).

(4) In the event of any underwriter being unable, when duly called upon, to carry out his obligations under the underwriting contract, any person who has in connection with that contract made a sworn declaration as required by subsection (1) shall, unless he proves that when he made the declaration he believed and had reasonable grounds for believing that the underwriter was or would be able to carry out his obligations, be guilty of an offence, and is liable on conviction to the penalty set out in section 492(3).

307. Signing, date and date of issue, of prospectus

(1) A prospectus in respect of an offer for the subscription of securities of a company shall be signed by every person named therein as a director of the company or by his agent authorised by him in writing to sign on his behalf.

(2) A prospectus in respect of any other offer of securities shall be signed by every person making such offer or by his agent authorised by him in writing to sign on his behalf or if the person making the offer is a company or firm, by two directors of such company, or if such company has only one director, by that director, or by not less than one-half of the partners in such firm or by an agent authorised by any such director or partner in writing to sign on his behalf.

(3) Where a prospectus has been signed by or on the behalf of directors of a company or partners in a firm as provided in subsections (1) and (2), every director of such company or partner in such firm shall be deemed to have authorised the issue of such prospectus notwithstanding that he has not signed it, unless he proves that it was issued without his knowledge, authority or consent.

(4) Every signature to a prospectus shall be dated and the latest of such dates shall be deemed to be the date of the prospectus.

(5) The date of registration of any prospectus in the Register of Companies shall, unless the contrary is proved, be taken as the date of the issue of prospectus.

308. Registration of prospectus

(1) No prospectus shall be registered by the Registrar unless the requirements of this Part have been complied with an dislodged with the Registrar for registration, together with such documents as are prescribed in this Part, within 14 days of the date of such prospectus.

(2) As soon as the Registrar has registered the prospectus he shall send notice of the registration to the person lodging the same or to the company.

309. Time limit for issue of prospectus

(1) No prospectus shall be issued more than three months after the date of the registration thereof, and if a prospectus is so issued, it shall be deemed to be a prospectus which has not been registered.

(2) Any person who knowingly is a party to the issue of a prospectus in contravention of subsection (1), shall be guilty of an offence and is liable on conviction to the penalty set out in section 492(2).

310. Advertising as to prospectus

(1) Every newspaper or other advertisement whatsoever offering or calling attention to an offer or intended offer of securities of a company to the public shall be deemed to be a prospectus issued by the person responsible for publishing or disseminating the advertisement (and all enactments and rules of law as to the contents of prospectuses and as to the liability in respect of statement in and omissions from prospectuses or otherwise relating to prospectuses shall apply and have effect accordingly), unless it contains no more information than the following-

(a) the number and description of the securities concerned;

(b) the name and date of registration of the company;

(c) the general nature of the main business or proposed main business actually carried on or to be carried on by the company;

(d) the names and addresses of the directors;

(e) the places at and times during which copies of the prospectuses may be obtained;

(f) where all the shares which are the subject of an offer are intended to be offered only to the shareholders of a company or debenture holders, as the case may be, with or without the right to renounce in favour of other persons-

(i) the issue price of such securities,

(ii) the ratio in which such securities will be offered to the shareholders or debenture holders entitled to accept the offer, and

(iii) the last day on which shareholders or debenture holders shall register as such in order to be entitled to receive the offer; and

(g) the last day for subscribing.

(2) No statement that, or to the effect that, the said advertisement is not a prospectus shall prevent the operation of this section.

311. Waiver of requirements of the Part void

Any condition requiring any applicant for shares to waive compliance with any requirements of this Part or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.

312. Variation of contract mentioned in prospectus

No company shall within one year after the date of registration of a prospectus vary or agree to the variation of the terms of a contract referred to in such prospectus unless the variation in specific terms is authorised or ratified by a general meeting of shareholders of the company of which notice has been given on a date not earlier than six months after the date of registration of the prospectus.

313. Liability for untrue statements in prospectus

(1) Where securities are offered to the public for subscription in pursuance of a prospectus, every person-

(a) who is, at the time of issue of the prospectus, a director of the company;

(b) who becomes a director at any time between the issue of the prospectus and the holding of the first annual general meeting of the company at which directors are elected or appointed;

(c) who with his authority is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time;

(d) who is a promoter of the company; or

(e) who has authorised the issue of the prospectus,

shall be liable to pay compensation to all persons who have acquired any shares on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof or issued therewith, or by reference incorporated therein.

(2) Where securities are offered to the public for sale in pursuance of a prospectus, every person-

(a) who has made the said offer;

(b) who under section 307(3) is deemed to have authorised the issue of such prospectus; or

(c) who is in relation to the company the securities of which are so offered, is any of the persons referred to in subsection (1),

shall be liable to pay compensation to all persons who have acquired any securities on the faith of the prospectus for the loss or damage they may have sustained by reason of any untrue statement therein, or in any report or memorandum appearing on the face thereof or issued therewith, or by reference incorporated therein.

(3) The liability provided for in subsection (1) or (2) shall not attach to any person if it is proved-

(a) with respect to every such untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that he had reasonable ground to believe, and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, believed that the statement was true;

(b) with respect to every such untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from the report or valuation of an expert, that it fairly represented the statement or was a correct and fair copy of or extract from the report or valuation and that the defendant had reasonable ground to believe and did up to the time of the issue of the prospectus believe that the person making the statement was competent to make it, and that the said person had given the consent required by this Act to the issue of the prospectus of the making of the offer and had not withdrawn that consent before lodgment of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment thereunder or before the acceptance of the offer; and

(c) with respect to every such untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, that it was a correct and fair representation of the statement or copy of or extract from the document; or

(d) that having consented to become a director of the company, he withdrew his consent before the issue of the prospectus and that it was issued without his authority or consent;

(e) that the prospectus was issued without his knowledge or consent and that on becoming aware of its issue, he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or

(f) that after the issue of the prospectus and before allotment or acceptance thereunder he, on becoming aware of any untrue statement therein, withdrew his consent hereto and gave reasonable public notice of the withdrawal and of the reason therefor.

(4) Where the prospectus contains the name of a person as a director of the company, or as having agreed to become a director thereof, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus and has not authorised or consented to the issue thereof, the directors of the company (except any without whose knowledge or consent the prospectus was issued) and any other person who issued it or authorised the issue thereof, shall be liable to indemnify the person named as aforesaid, against all damages, costs and expenses for which he may be liable by reason of his name having been so stated in the prospectus or in defending himself against any action or legal proceedings brought against him in respect thereof.

(5) Every person who by reason of his being a director or having been named as a director, or having agreed to become a director, or of his having authorised the issue of the prospectus or of his having become a director between the issue of the prospectus and holding of the first general meeting of the company at which directors are elected or appointed, has satisfied any liability to make payment under this section, may recover a contribution, as in cases of contract, from any other person, who, if sued separately, would have been liable to make the same payment, unless the person who has satisfied such liability was, and that other person was not, guilty of fraudulent misrepresentation.

314. Liability of experts and others

(1) Where the consent of any person required under section 304(2) and (3) and such person has given that consent-

(a) he shall not, by reason of having given such consent, be liable as a person who has authorised the issue of the prospectus either-

(i) under section 313(1) or (2) to compensate persons subscribing or purchasing on the faith of the prospectus, except in respect of any untrue statement purporting to be made by him as an expert, or

(ii) under section 313(4) to indemnify any person against liability under the said section 313(1) or (2); but

(b) he shall, in respect of any untrue statement purporting to be made by him as an expert, be liable under the said section 313(1) or (2), unless one of the following things (which shall in his case be in lieu of the grounds of defence available to others by virtue of section 313(3)), is proved, namely-

(i) that having given his consent as aforesaid he withdrew it in writing before lodgement of a copy of the prospectus for registration,

(ii) that after lodgement of a copy of the prospectus for registration and before allotment thereunder to, or before acceptance thereunder by, the person complaining, he, on becoming aware of the untrue statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason therefor; or

(iii) that he was competent to make the statement and that he had reasonable ground to believe and did up to the time of the allotment of the shares or the acceptance of the offer, as the case may be, believe that the statement was true.

(2) Where under section 304(2) and (3) the consent of any person is required to the issue of a prospectus, and he either has not given that consent or has withdrawn it before the issue of the prospectus, he shall be entitled to indemnity under section 313 as if he had without his consent been named in the prospectus as a director of the company.

315. Offences in respect of untrue statements in prospectus

(1) Where a prospectus contains a statement which is untrue, every person referred to in section 313(1) or (2) shall, subject to the provisions of subsections (3) and (4) of this section, be guilty of an offence and shall be liable on conviction to the penalty set out in section 492(4).

(2) Where there is published with or as part of a prospectus a report of any expert or an extract from such report and such report or extract contains a statement which is untrue, the expert shall, provided he has given his consent to the inclusion of such statement in the prospectus in the form and context in which it appears, and subject to the provisions of subsections (3) and (4), be guilty of an offence, and is liable on conviction to the penalty set out in section 492(4).

(3) In any prosecution under this section it shall be a defence if it is proved either that the untrue statement was immaterial or -

(a) with respect to every such untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, that the person charged had, after reasonable investigation, reasonable ground to believe and did up to the time of the allotment of the shares or acceptance of the offer (as the case may be) believe that the statement was true, and that there was no omission to state any material fact necessary to make the statement as set out not misleading;

(b) with respect to every untrue statement purporting to be a statement by or contained in what purports to be a copy of or extract from a report or valuation of an expert, that the person charged had reasonable ground to believe and did believe that the person making the report or valuation was competent to make it; and

(c) with respect to every such untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of or extract from a public official document, that it was a correct and fair representation of the statement or copy of or extract from the document.

(4) In any prosecution under this section of any person it shall be a defence if it is proved -

(a) that having consented to become a director of the company he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent;

(b) that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent; or

(c) that after the issue of the prospectus and before allotment or acceptance thereunder, he, on becoming aware of any untrue statement therein, withdrew his consent thereto and gave reasonable public notice of the withdrawal, and of his reason therefor.

316. No diminution of liability under any other law or the common law

Nothing in this Part shall limit or diminish any liability which any person may incur under this Act apart from this Part, or under any other law, or under the common law.

317. Time limit as to allotment or acceptance

(1) No company shall allot any shares offered to the public for subscription and no offeror shall accept any offer to purchase any shares offered for sale to the public unless the application concerned is received by the company or the offeror, as the case may be, before the expiration of a period of four months after the date of registration of the prospectus.

(2) Any director or officer of a company or any offeror of, if the offeror is a company, any director or officer of that company who knowingly contravenes or permits the contravention of subsection (1) with respect to allotment or acceptance of an offer, shall be guilty of an offence, and is liable on conviction to the penalty set out in section 493(2).

318. No allotment unless minimum subscription received

(1) No shares shall be allotted on any application made in pursuance of a prospectus for subscription unless the amount stated in that prospectus as the minimum amount which in the opinion of the directors of the company concerned has to be raised by the issue of share capital in order to provide for the matters specified in paragraph 21 of the Tenth Schedule has been subscribed and the amount so stated has been paid to and received by the company.

(2) For the purposes of subsection (1) -

(a) an amount stated in any cheque received by the company shall not be deemed to have been paid to and received by it until the amount of the cheque has been unconditionally credited to its account with its banker; and

(b) any amount paid to and received by the company shall be reduced by the amount of any money, bill, promissory note or cheque which it has at any time delivered to the payer otherwise than in discharge of a debt bona fide due to him by the company.

(3) The amount so stated in the prospectus shall be reckoned exclusively of any amount payable otherwise than in cash and is in this Act referred to as "the minimum subscription".

(4) The amount paid on application shall be set apart by the directors as separate fund in a separate account with a banking institution registered under the Banking Act, and shall not be available for the purposes the company or for the satisfaction of its debts until the minimum subscription has been made up.

(5) If the requirements prescribed in subsection (1) have not been complied with on the expiration of 60 days after the issue of the prospectus, moneys received from applicants for shares shall forthwith be repaid to them without interest, and, if any such money is not so repaid within a period of 80 days after the issue of the prospectus, the directors and officers of the company shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum reckoned from the expiration of the said period of 80 days.

(6) It shall be a defence to any claim under subsection (5), or any charge to prove that the default which is the subject of the claim or charge, was not due to any misconduct or negligence on the part of the defendant or the accused.

(7) Any director or officer of the company who knowingly contravenes or permits the contravention of any provision of this section, shall, in addition to other liability incurred under subsection (5)(a), be guilty of an offence, and be liable on conviction to the penalty set out in section 492(3).

319. No allotment or acceptance if application form not attached to prospectus

(1) No company shall allot any shares offered to the public for subscription and no offeror shall accept any offer to purchase any shares offered for sale to the public unless the subscription or offer has been made on an application form which has been attached to or accompanied by a prospectus as required by section 302 or unless it is shown that the applicant, at the time of his application, was in fact in possession of a copy of the prospectus or was aware of its contents.

(2) Any director or officer of a company or any offeror (or if the offeror is a company, any director or officer of that company) who knowingly contravenes or permits the contravention of subsection (1), shall be guilty of an offence and shall on conviction be liable to the penalty set out in section 492(2).

320. Voidable allotment where section 317, 318 or 319 contravened

(1) An allotment made by a company to an applicant, or the acceptance of an offer made by an applicant, in contravention of any provision of sections 317, 318 or 319 shall be voidable at the instance of the applicant concerned within 30 days after the date of allotment or acceptance, and not later, and the right to treat as voidable such allotment shall apply notwithstanding that the company concerned may be in the course of being wound up.

(2) When an allotment or an acceptance is declared void under subsection (1), every director and every officer of the company concerned or the offeror, and if the offeror is a company, every director and every officer thereof, shall be liable to compensate the company concerned and the applicant for any loss, damages or costs which such company or the applicant may have sustained or incurred thereby:

Provided that no proceedings to recover any such loss, damages or costs shall be commenced after the expiration of two years from the date of the relevant allotment or acceptance.

321. Minimum interval before allotment or acceptance

(1) No allotment of shares or acceptance of an offer in respect of shares of a company shall be made in pursuance of a prospectus, and no proceedings shall be taken on applications made in pursuance of a prospectus, until the beginning of the third day after that on which the prospectus is first issued or such later time (if any) as may be specified in the prospectus.

(2) For the purposes of subsection (1), the reference therein to the day on which the prospectus is first issued shall be construed as a reference to the day on which it is first issued as a newspaper advertisement, or, if it is not issued as a newspaper advertisement before the third day after that on which it is first issued in any other manner, as a reference to the day on which it is first issued in such other manner.

(3) The validity of an allotment or acceptance shall not be affected by any contravention of the provisions of subsection (1), but, in the event of any such contravention, the company concerned, and every director and every officer of the company and the offeror, and, if the offeror is a company, every director and every officer thereof who knowingly is a party to the contravention, shall be guilty of an offence, and is liable on conviction to the penalty set out in section 492(3).

(4) An application for shares of a company which is made in pursuance of a prospectus shall not be revocable before the expiration of the third day after the time of the opening of the subscription lists or offer or the giving before the expiration of the said third day, of a public notice under section 304 having the effect of excluding or limiting the liability under that section of the person giving such notice.

(5) In reckoning any number of days for the purposes of this section, Saturdays, Sundays and public holidays shall not be taken into account.

(6) The "beginning of the third day" or the "later time" referred to in subsection (1) is in this Part referred to as "the time of the opening of the subscription lists or offers".

322. Conditional allotment if prospectus states shares to be listed by stock exchange

(1) No prospectus containing a statement to the effect that application has been or will be made for permission for the shares offered thereby to be dealt in on a stock exchange shall be issued unless an application has been made in accordance with the requirements of the stock exchange concerned on or before the date of issue of such prospectus and it names the particular stock exchange to which such application has been made.

(2) Any allotment of shares in pursuance of a prospectus referred to in subsection (1) shall be subject to the condition that the application for permission for the said shares to be dealt in on the stock exchange concerned, is granted or that an appeal against a refusal of such application, is upheld.

(3) Any money received in respect of applications for shares in pursuance of a prospectus referred to in subsection (1) shall be set apart by the directors of the company as a separate fund in a separate account with a banking institution registered under the Banking Act, and shall not be available for the purposes of the company or for the satisfaction of its debts so long as the company may in terms of subsection (4) become liable for the repayment thereof, and if any issue of shares in pursuance of such a prospectus is oversubscribed, the directors of the company shall forthwith repay the amounts oversubscribed to the applicants.

(4) Where the application for permission to deal in the shares on a stock exchange has been refused and no appeal has been noted or when an appeal against the refusal of an application has been dismissed or an appeal against the granting of an application has been upheld, the company shall forthwith repay all moneys received in respect of applications made in pursuance of the prospectus together with any interest earned thereon, if any.

(5) If any money required to be repaid under subsection (3) and subsection (4) is not repaid within 14 days after the company becomes liable to repay it, the directors and officers of the company, together with the company, shall be jointly and severally liable to repay that money with interest at the rate of 10 per cent per annum from the expiration of the fourteenth day.

(6) If any provision of subsection (1), (3) or (4) is contravened or not complied with-

(a) the company, and every director or officer thereof who knowingly is a party to such contravention or non-compliance, shall be guilty of an offence; and

(b) it shall be a defence to any claim or charge under subsection (4) to prove that the default which is the subject of the claim of the contravention or non-compliance was not due to misconduct or negligence on the part of the defendant or the accused.

(7) The provisions of this section shall-

(a) in relation to any shares agreed to be taken by a person underwriting an offer of the shares by a prospectus, have effect as if he had applied therefor in pursuance of the prospectus;

(b) in the case of a prospectus offering shares for sale, be construed, except in so far as the context otherwise indicates-

(i) as if any reference therein to the allotment of shares were a reference to the acceptance of the offer in respect thereof,

(ii) subject to the provisions of subparagraph (iii), as if any reference therein to a company by which a prospectus has been issued, or a director or officer thereof, were a reference to the person by whom the shares have been offered, and

(iii) where the person by whom the shares have been offered is a company, as if the reference therein to a director or officer of a company by which a prospectus has been issued, were a reference to a director or officer of the company by which the shares have been offered for sale.

(8) In reckoning any number of days for the purpose of this section, Saturdays, Sundays and public holidays shall not be taken into account.

323. Compulsory acquisition of minority in affected transaction

(1) In this section, unless the context otherwise indicates-

"acquisition", in relation to securities of any company, means the acquisition of securities in such company by any means whatsoever, including purchase or subscription;

"acting in concert" means, subject to subsection (2), acting in pursuance of an agreement, arrangement or understanding (whether formal or informal) between two or more persons pursuant to which they or any of them cooperate for the purposes of entering into or proposing an affected transaction;

"affected transaction" means any transaction (including a transaction which forms part of a series of transactions) or scheme, whatever form it may take, which, taking into account any securities held before such transaction or scheme, has or would have the effect in the event of any offers to acquire securities of a company being accepted of the transfer of all the securities included in a class of securities being transferred to the offeror;

"offeree company" means any company the securities or part of the securities of which is or is to be the subject of any affected transaction or proposed affected transaction;

"offeror" means any person or two persons acting in concert who propose any affected transaction.

(2) If an offer for the acquisition of securities under an affected transaction involving the transfer of securities or any class of securities of a company to an offeror, has within four months after the date of the making of such offer been accepted by the holders of not less than nine-tenths of the securities of any class of securities whose transfer is involved (other than securities already held at the date of the issue of the offer by, or by a nominee for, the offeror or its subsidiary), the offeror may at any time within two months after the date of such acceptance give notice in the prescribed manner to any holder of such securities who has not accepted the said offer, that he or it desires to acquire his or its securities, and where such notice is given, the offeror shall be entitled and bound to acquire those securities on the terms on which under the affected transaction the securities of the holders who have accepted the offer, were or are to be transferred to the offeror, unless on an application made by such holder within six weeks from the date on which the notice was given, the court -

(a) orders that the offeror shall not be so entitled and bound; or

(b) imposes conditions of acquisition different from those of the offer.

(3) If the said offer has not been accepted to the extent necessary for entitling the offeror to give notice under subsection (2), the court may, on application by the offeror, issue an order authorising him to give notice under that subsection if the court is satisfied that -

(a) the offeror has after reasonable enquiry been unable to trace one or more of the persons holding securities to which the offer relates;

(b) the securities whose transfer is involved, by virtue of acceptances of the offer, together with the securities held by the person or persons referred to in paragraph (a), amount to not less than the minimum specified in subsection (2); and

(c) the consideration offered is fair and reasonable, but the court shall not issue an order under this subsection unless it considers that it is just and equitable to do so having regard, in particular, to the number of holders of securities who have been traced but who have not accepted the offer.

(4) Where a notice has been given by the offeror under subsection (2) and the court, on an application made by a holder of the securities who has not accepted the offer, has not ordered as contemplated in subsection (2), the offeror shall, on the expiration of six weeks from the date on which the notice was given, or, if an application to the court by such holder is then pending, after the application has been disposed of, transmit a copy of the notice to the offeree company, together with an instrument of transfer executed on behalf of such holder by any person appointed by the offeror, and pay or transfer to the offeree company the amount or other consideration representing the price payable by the offeror for the securities which by virtue of this section he or it is entitled to acquire, and the offeree company shall thereupon register the offeror as the holder of those securities:

Provided that an instrument of transfer shall not be required for any security for which a share warrant is for the time outstanding.

(5) Where, in pursuance of an affected transaction referred to in subsection (2), securities of an offeree company were or are to be transferred to a person and those securities, together with any other securities of the said offeree company held by, or by a nominee for, the offeree or its subsidiary at the date of the acceptance of the offer in question comprise or include nine-tenths of the securities in the offeree company or of any class of those securities, then-

(a) the offeror shall within a month from the date of such acceptance (unless he or it has already complied with this requirement under subsection (2)) give notice of that fact in the prescribed manner to the holders of the remaining securities or of the remaining securities of that class, as the case may be, who have not accepted the offer under the affected transaction in question; and

(b) any such holder may within three months from the giving of the notice to him require the offeror to acquire the securities in question, and where the holder gives notice under paragraph (b) in relation to any securities, the offeror shall be entitled and bound to acquire the conditions on which under the affected transaction the securities of the holders who have accepted the offer were or are to be transferred to him or it, or on such other conditions as may be agreed upon or as the court on the application of either the offeror or the holder may think fit to order.

(6) Any sum, and any dividend or other sum accruing from any other consideration, received by the offeree company under this section shall be paid into a separate bank account with a banking institution registered under the Banking Act, and any such sums, dividend or any other consideration so received shall be held in trust by the offeree company for the person entitled to the securities in respect of which the said sums, dividend or other consideration was received.

(7) In this section any reference to a "holder of securities who has not accepted the offer" includes any holder who has failed or refused to transfer his securities to the offeror in accordance with the affected transaction.

324. Prohibition of insider trading

(1) Any person who, whether directly or indirectly, knowingly deals in a security on the basis of unpublished price sensitive information in respect of that security, shall commit an offence if such person knows that such information has been obtained -

(a) by virtue of a relationship of trust or any other contractual relationship, whether or not the person concerned is a party to that relationship; or

(b) through espionage, theft, bribery, fraud, misrepresentation or any other wrongful method, irrespective of the nature thereof,

and such person shall on conviction be liable to the penalty set out in section 492(3).

(2) For the purposes of this section -

(a) "unpublished price-sensitive information", in respect of a security, means information which -

(i) relates to matters in respect of the internal affairs of a company or its operations, assets, earning power or involvement as offeror or offeree company in an affected transaction or proposed affected transaction,

(ii) is not generally available to the reasonable investor in the relevant markets for that security, and

(iii) would reasonably be expected to affect materially the price of such security if it were generally available;

(b) "generally available" means available in the sense that such steps have been taken, and such time has elapsed, that it can reasonably be expected that such information as referred to in paragraph (a) is or should be known to such investor as referred to in subparagraph (ii) of paragraph (a).

(3) If in criminal proceedings at which an accused is charged with an offence under subsection (1), it is proved that -

(a) the accused was in possession of unpublished price-sensitive information in respect of the security in question at the time of the alleged commission of the offence; or

(b) unpublished price-sensitive information was obtained in the manner contemplated in subsection (1)(a) or (b),

he or it shall be deemed, unless the contrary is proved, in the case of paragraph (a), to have knowingly dealt in that security on the basis of such information, or, in the case of paragraph (b), to have known that such information was so obtained.

(4) Where an advantage is gained from a dealing in securities in contravention of the provisions of this section, any person who gained that advantage shall, whether or not any person has been prosecuted for or convicted of an offence in respect of the contravention, be liable-

(a) to any other person for the amount of any loss incurred by that other person by reason of the gaining of that advantage;

(b) to the company that issued or made available those securities, for any profit that accrued by him or loss avoided by him by reason of the gaining of that advantage; and

(c) any amount which the court considers to be an appropriate pecuniary penalty provided that the amount of the pecuniary penalty shall not exceed-

(i) the consideration for the securities, or

(ii) three times the amount of the gain made or loss avoided by the person in buying or selling the securities, whichever is the greater.

(5) Where a loss or profit referred to in subsection (4) is incurred by means of an advantage gained from a dealing in securities, the amount of the loss or profit shall be the difference between-

(a) the price at which the dealing was effected; and

(b) the price that, in the opinion of the court before which it is sought to recover the amount of the loss or profit, would have been the market price of the securities at the time of the dealing if the specific information used to gain that advantage had been generally known at that time.

(6) The company may bring an action in the name of and for the benefit of a person for recovery of a loss or profit referred to in subsection (4).

(7) An action to recover a loss or profit referred to in subsection (4) may not be brought after the expiry of the period of-

(a) two years next succeeding the dealing in securities to which the action relates; or

(b) six months next succeeding the discovery of the relevant fact by the person who suffered the loss or seeks the profit, whichever first occurs.

(8) Nothing in subsection (7) affects any other liability that a person may incur under any other law.

(9) The provisions of this section shall not apply to dealings in the members’ interest in a private company or a close company.

(10) Subject to subsection (5), the Minister may, by notice in the Gazette exempt any class of persons from the provisions of this section on such conditions and to such extent as he may deem fit, and may at any time in like manner revoke or amend any such exemption.

325. Fraudulent inducement to invest

(1) Every person who, by any fraudulent means, induces or attempts to induce another person to enter into or offer to enter into -

(a) an agreement for, or with a view to, acquiring, disposing of, subscribing for or underwriting securities; or

(b) an agreement for the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities,

shall be guilty of an offence and liable to the penalty set out in section 492(4).

(2) For the purposes of subsection (1), "fraudulent means" shall include -

(a) any statement, promise or forecast which the person knows to be misleading, false or deceptive;

(b) any dishonest concealment of material facts; or

(c) any reckless making of any statement, promise or forecast which is misleading, false or deceptive.

326. False statements and transactions

Every person who knowingly or recklessly -

(a) gives a fictitious price to securities by means of false rumours;

(b) obtains admission to listing on a stock exchange by means of a false statement; or

(c) makes any fictitious dealings in securities which are listed on any stock exchange, shall be guilty of an offence and liable to the penalty set out in section 492(4).

327. Misleading documents

Every person who -

(a) distributes or causes to be distributed any documents which, to his knowledge contain -

(i) an invitation to enter into an agreement of the kind referred to in section 325, or

(ii) information calculated to lead directly or indirectly to the entry into an agreement of the kind referred to in section 325 by the recipient of the information; or

(b) has in his possession for the purpose of distribution any documents which, to his knowledge, are such documents as are specified in paragraph (a),

shall be guilty of an offence and liable to the penalty set out in section 492(4).

328. Stock market manipulation

(1) A person shall not, with the fraudulent intent to induce other persons to purchase or subscribe for securities of a body corporate or of a related corporation effect, take part in, be concerned in or carry out, either directly or indirectly, two or more transactions in securities of the body corporate, being transactions that have, or are likely to have, the effect of abnormally or artificially raising the price of securities which are being traded through a stock exchange.

(2) A person shall not, with the fraudulent intent to induce other persons to sell securities of a body corporate or of a related corporation, effect, take part in or be concerned in or carry out, either directly or indirectly, two or more transactions in securities of the body corporate, being transactions that have or are likely to have, the effect of abnormally or artificially lowering the price of securities of a body corporate the securities of which are being traded through a stock exchange.

(3) A person shall not, with the fraudulent intent to induce other persons to sell, purchase or subscribe for securities of a body corporate or of a related corporation, effect, take part in, be concerned in or carry out, either directly or indirectly, two or more transactions in securities of a body corporate, being transactions that have, or are likely to have the effect of abnormally or artificially maintaining the price of securities of the body corporate which securities are being traded through a stock exchange.

(4) A reference in this section to a transaction, in relation to securities of a body corporate, includes a reference to the making of an offer to sell or purchase such securities of the body corporate; and a reference to the making of an invitation, however expressed, expressly or impliedly invites a person to offer to sell or purchased securities of the body corporate.

(5) Every person who acts in contravention of this section shall commit an offence and shall, on conviction be liable to the penalty set out in section 492(4).

329. Disclosure of beneficial interest in securities

(1) In this section, unless the context otherwise requires-

"beneficial interest" in relation to a security, means-

(a) the right or entitlement to receive any dividend or interest payable in respect of that security; or

(b) the right to exercise or cause to be exercised, in the ordinary course, any or all of the voting, conversion, redemption or other rights attaching to such security, but does not include any interest held by a person in a Collective Investment undertaking under the Collective Investment Undertakings Act;

"Exchange" means the Botswana Stock Exchange established under the Botswana Stock Exchange Act;

"issuer" means a public company which has issued securities to the public which are listed;

"substantial shareholder" means a person who holds beneficial interests equal to or in excess of five per cent of the total number of securities of that class issued by the issuer.

(2) A person is deemed to have a beneficial interest in a security if -

(a) the spouse of the person married in community of property or the minor children of that person have a beneficial interest in such security;

(b) that person acts in terms of an agreement with another person holding a beneficial interest and the agreement is in respect of the co-operation between them for the acquisition, disposal or any other matter relating to a beneficial interest in such security;

(c) it is the holding company of a company that has a beneficial interest in such security;

(d) a body corporate or trust has a beneficial interest in such security and -

(i) the body corporate or its directors or the trustees are accustomed to act in accordance with the directions or instructions of that person, or

(ii) that person is entitled to exercise or control the exercise of the majority of the voting rights at general meetings of the body corporate or trust; or

(e) the security is held by another person on that person’s behalf by virtue of the official office of that other person.

(3) Where securities of an issuer are registered in the name of a person, and that person ("the registered shareholder") is not the holder of the beneficial interest in all of the securities held by the registered shareholder, the registered shareholder shall, at the end of every three month period after 30th June, 2001, disclose to the issuer the identity of each person on whose behalf the registered shareholder holds securities and the number and class of securities issued by that issuer held on behalf of each such person.

(4) The information required in terms of subsection (3) shall be furnished in writing within seven days of the end of the three month period referred to in that subsection.

(5) Where a registered shareholder who has made disclosure under subsections (3) and (4) ceases to be a holder of such securities or there is a change in the nature and extent of the beneficial interest the registered shareholder shall forthwith give notice of that fact and in the case of any change in the particulars of that change to the issuer.

(6) An issuer may by notice in writing require a person who is a registered shareholder of, or whom the issuer knows or has reasonable cause to believe to have a beneficial interest in, securities issued by that issuer, to confirm or deny whether or not such person holds a beneficial interest in such securities, and if the security is held for another person, the person to whom the request is made shall disclose to the issuer the identity of the person on whose behalf that security is held:

Provided that the registered shareholder may levy such fee for the furnishing of information requested as may be prescribed by the Committee of the Botswana Stock Exchange from time to time.

(7) A notice under subsection (6) may, in addition, require the addressee to give particulars of the extent of the beneficial interest held during the three years preceding the date of the notice.

(8) The information required in terms of subsections (6) and (7) shall be furnished within a reasonable time specified in the notice, but not later than 14 days from the date of receipt of the notice.

(9) All issuers of securities shall establish and maintain a register of substantial shareholders in terms of this section and shall-

(a) publish in their annual financial statements a list of the persons who are substantial shareholders together with the extent of the beneficial interests held by those persons;

(b) enter in such register the following particulars-

(i) the name and address of the substantial shareholder,

(ii) the number, class and nominal value of the share in which the substantial shareholder has an interest,

(iii) the name of the holder of the share if the substantial shareholder is not the holder,

(iv) the nature of the substantial shareholder’s interest and its duration if it is limited in duration,

(v) the date of the acquisition of the interest by the substantial shareholder,

(vi) the date of the disposal of the interest by the substantial shareholder or of any change in the nature of the interest held by him; and

(c) open such register to inspection in accordance with section 220.

(10) Every person in respect of whom an entry is required to be made in the register of substantial shareholders, by reason of the fact that the person holds beneficial interests equal to or in excess of five per cent of the total number of securities of that class issued by the issuer, shall within 14 days after that person becomes a substantial shareholder, or after any other matter which requires an entry occurs or arises, give to the issuer and to the Exchange written notice of the fact together with a statement of the particulars specified in subsection (9).

(11) Where a substantial shareholder who has made disclosure under subsection (10) ceases to be a substantial shareholder, or there is a change in the nature and extent of his beneficial interest that person shall forthwith give notice of that fact and in the case of any change in the particulars of that change to the issuer and to the Exchange.

(12) A person who fails to comply with any provision of this section or to make a disclosure as required by this section or who makes a false disclosure shall be guilty of an offence and shall be liable on conviction to the penalty set out in section 492(3).