627A

Part X: Restrictions on Sale of Shares and Offers of Shares for Sale

296 Prospectuses of foreign companies inviting subscriptions for shares or offering shares for sale

(1) It shall not be lawful for any person—

(a) to issue, circulate or distribute in Gibraltar any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Gibraltar, whether the company has or has not established, or when formed will or will not establish a place of business in Gibraltar, unless—

(i) before the issue, circulation or distribution of the prospectus in Gibraltar a copy thereof certified by the chairman and two other directors of the company as having been approved by resolution of the managing body, has been delivered for registration  to the Registrar;

(ii) the prospectus states on the face of it that the copy has been so delivered;

(iii) the prospectus is dated;

(iv) the prospectus otherwise complies with this Part; or

(b) to issue to any person in  Gibraltar a form of application for shares in or debentures of such a company or intended company as aforesaid, unless the form is issued with a prospectus which complies with this Part:

Provided that this provision shall not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures.

(2) This section shall not apply to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, but, subject as aforesaid, this section shall apply to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently.

(3) Where any document by which any shares in or debentures of a company incorporated outside Gibraltar are offered for sale to the public would, if the company concerned had been a company within the meaning of this Ordinance, have been deemed by virtue of section 38 to be a prospectus issued by the company, that document shall be deemed to be for the purposes of this section, a prospectus issued by the company.

(4) An offer of shares or debentures for subscription or sale to any person whose ordinary business or part of whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent shall not be deemed an offer to the public for the purposes of this section.

(5) Section 37 shall extend to every prospectus to which this section applies.

(6) A person who is knowingly responsible for the issue, circulation or distribution of any prospectus, or for the issue of a form of application for shares or debentures, in contravention of the provisions of this section is guilty of an offence and is liable on summary conviction to a fine at level 5 on the standard scale.

(7) In this section and section 297, “prospectus”, “shares”, and “debentures” have the same meanings as when used in relation to a company incorporated under this Ordinance.

(8) With the exception of the requirements contained in paragraph (a)(i), the provisions of subsection (1) shall not apply to a prospectus or form of application which—

(a) is issued in a member state of the European Economic Communities in accordance with the laws of that state regulating the issue of such a prospectus or form of application; and

(b) is in the English language or if not in the English language is accompanied by a certified translation into the English language; and

(c) contains or is accompanied by, details of the name and address of the competent authority in the member state in which the prospectus or form of application was issued and with which it is registered or by which its issue, circulation or distribution was authorised.

628

297 Requirements as to prospectus

(1) In order to comply with this Part a prospectus in addition to complying with the provisions of subparagraphs (ii) and (iii) of paragraph (a) of section 296(1) must—

(a) contain particulars with respect to the following matters:—

(i) the objects of the company;

(ii) the instrument constituting or defining the constitution of the company;

(iii) the enactments, or provisions having the force of an enactment by or under which the company was incorporated;

(iv) an address in Gibraltar where such instrument, enactments or provisions, or copies thereof, and if the same are in a foreign language a translation thereof certified in the prescribed manner, can be inspected;

(v) the date on which and the country in which the company was incorporated;

(vi) whether the company has established a place of business in Gibraltar, and, if so, the address of its principal office in Gibraltar:

Provided that the provisions of sub-paragraphs (i), (ii), (iii) and (iv) of this paragraph shall not apply in the case of a prospectus issued more than two years after the date at which the company is entitled to commence business.

(b) subject to the provisions of this section, state the matters specified in Part I  of Schedule 3 (other than those specified in paragraph 1 of Part I) and set out the reports specified in Part II of that Schedule subject always to the provisions contained in part III of that Schedule:

Provided that—

(i) where any prospectus is published as a newspaper advertisement it shall be a sufficient compliance with the requirement that the prospectus must specify the objects of the company if the advertisement specifies the primary object with which the company was formed, and

(ii) in paragraph 3 of Part I of Schedule 3 a reference to the constitution of the company shall be substituted for the reference to the articles; and

(iii) paragraph 1 of Part III of that Schedule shall have effect as if the reference to the memorandum were omitted therefrom.

(2) Any condition requiring or binding any applicant for shares or debentures to waive compliance with any requirement of this section, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, shall be void.

(3) In the event of non-compliance with or contravention of any of the requirements of this section, a director or other person responsible for the prospectus shall not incur any liability by reason of the non-compliance or contravention, if—

(a) as regards any matter not disclosed, he proves that he was not cognisant thereof, or

(b) he proves that the non-compliance or contravention arose from an honest mistake of fact on his part; or

(c) the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or were otherwise such as ought in the opinion of that court, having regard to all the circumstances of the case, reasonably to be excused:

Provided that, in the event of failure to include in a prospectus a statement with respect to the matters contained in paragraph 15 of Part 1 of Schedule 3, no director or other person shall  incur any liability in respect of the failure unless it be proved that he had knowledge of the matters not disclosed.

(4) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Ordinance, apart from this section.

(5) The provisions of subsection (1) shall not apply to a prospectus which is—

(a) issued in a member state of the European Economic Communities in accordance with the laws of that state regulating the issue of such a prospectus; and

(b) is in the English language or if not in the English language is accompanied by a certified translation into the English language; and

(c) contains or is accompanied by details of the name and address of the competent authority in the member state in which the prospectus was issued and with which it is registered or by which its issue, circulation or distribution was authorised.

629

298 Restrictions on offering of shares for subscription or sale

(1) It shall not be lawful for any person to go from house to house offering shares for subscription or purchase to the public or any member of the public.

In this subsection, “house” shall not include an office used for business purposes.

(2) Subject as hereinafter provided in this subsection, it shall not be lawful to make an offer in writing to any member of the public (not being a person whose ordinary business or part of whose ordinary business it is to buy or sell shares, whether as principal or agent) of any shares for purchase, unless the offer is accompanied by a statement in writing (which must be signed by the person making the offer and dated) containing such particulars as are required by this section to be included therein and otherwise complying with the requirements of this section, or, in the case of shares in a company incorporated outside Gibraltar, either by such a statement as aforesaid, or by such a prospectus as complies with this Part:

Provided that the provisions of this subsection shall not apply—

(a) where the shares to which the offer relates  are shares which are quoted on, or in respect of which permission to deal has been granted by, any recognised stock exchange in Gibraltar and the offer so states and specifies the stock exchange; or

(b) where the shares to which the offer relates are shares which a company has allotted or agreed to allot with a view to their being offered for sale to the public; or

(c) where the offer was made only to persons with whom the person making the offer has been in the habit of doing regular business in the purchase or sale of shares.

(3) The statement shall not contain any matter other than the particulars required by this section to be included therein, and shall  not be in characters less large or less legible than any characters used in the offer or in any document sent therewith.

(4) The statement shall contain particulars with respect to the following matters:—

(a) whether the person making the offer is acting as principal or agent, and if as agent the name of his principal and an address in Gibraltar where that principal can be served with process;

(b) the date on which and the country in which the company was incorporated and the address of its registered or principal office in Gibraltar;

(c) the authorized share capital of the company and the amount thereof which has been issued, the classes into which it is divided and the rights of each class of share-holders in respect of capital, dividends and voting;

(d) the dividends (if any) paid by the company on each class of shares during each of the three financial  years immediately preceding the offer, and if no dividend has been paid in respect of shares of any particular class during any of those years, a statement to that effect;

(e) the total amount of any debentures issued by the company and outstanding at the date of the statement, together with the rate of interest payable thereon;

(f) the names and addresses of the directors of the company;

(g) whether or not the shares offered are fully paid up, and, if not, to what extent they are paid up;

(h) whether or not the shares are quoted on, or permission to deal therein has been granted by, any recognised stock exchange in Gibraltar or elsewhere, and, if so, which, and, if not, a statement that they are not so quoted or that no such permission has been granted;

(i) where the offer relates to units, particulars of the names and addresses of the persons in whom the shares represented by the units are vested, the date of and the parties to any document defining the terms on which those shares are held, and an address  in Gibraltar where that document or a copy thereof can be inspected.

In this subsection, “Company” means the company by which the shares to which the statement relates were or are to be issued.

(5) A person who acts, or incites, causes or procures any person to act, in contravention of this section, is guilty of an offence and is liable, on summary conviction to imprisonment for six months and to a fine at level 4 on the standard scale, and in the case of a second or subsequent offence to imprisonment for twelve months and to a fine at level 5 on the standard scale.

(6) Where a person convicted of an offence against this section is a company (whether a company within the meaning of this Ordinance or not), every director and every officer concerned in the management of the company is guilty of the like offence unless he proves that the act constituting the offence took place without his knowledge or consent.

(7) In this section, unless the context otherwise requires, “shares” mean the shares of a company, whether a company within the meaning of this Ordinance or not, and includes debentures and units, and “unit” means any right or interest (by whatever name called) in a share, and for the purposes of this section a person shall not in relation to a company be regarded as not being a member of the public by reason only that he is a holder of shares in the company or a purchaser of goods from the company.

(8) Where any person is convicted of having made an offer in contravention of the provisions of this section, the court before which he is convicted may order that any contract made as a result of the offer shall be void, and where it makes any such order, may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares.