Members
 
 
 
ACT 125
COMPANIES ACT 1965 (REVISED - 1973)
PART XI - VARIOUS TYPES OF COMPANIES, ETC.
DIVISION 1 - INVESTMENT COMPANIES

 
Section 322. Restriction on underwriting by investment companies.
 
Section 322. Restriction on underwriting by investment companies. (COMPANIES ACT 1965 (REVISED - 1973) - ACT 125) (1) An investment company shall not underwrite any issue of authorized securities to an amount that, when added to the amount or amounts, if any, to which it has previously underwritten a current issue or issues of other authorized securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to forty per centum of its net tangible assets.

(2) An investment company shall not underwrite any issue of non-authorized securities to an amount that, when added to the amount or amounts, if any, to which it has previously underwritten a current issue or issues of other non-authorized securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to twenty per centum of its net tangible assets.

Provisions for unloading securities underwritten and not taken up

(3) Where—

    (a) an investment company has underwritten any issue of securities and, in relation to the underwriting, has not contravened subsection (1) or (2); and

    (b) the investment company, as a result of the underwriting, invests in a corporation, being an investment contrary to section 321,

the investment company shall be deemed not to have contravened that section by reason of so investing in the corporation if, at the expiration of twelve months after so investing—

    (c) the amount invested by it in the corporation does not exceed an amount equivalent to ten per centum of the net tangible assets of the investment company; and

    (d) it does not hold more than five per centum of the subscribed ordinary share capital of the corporation.

(4) This section extends to and in relation to sub-underwriting as if the sub-underwriting were underwriting.

Interpretation

(5) In this section—

"authorized securities" means securities in which, by any written law trustees are authorized to invest trust funds in their hands;

"non-authorized securities" means securities other than authorized securities.