The Companies Regulations 1966 [P.U. 173/66.], which in these Regulation are referred to as the "principal Regulations", are amended by inserting after Part III the following Part:
"PART IlIA
SHARES BUY BACK BY A COMPANY
Declaration by directors.
18A. (1) Where a company proposes to purchaseit own shares or to give financial assistance to a person to buy its own shares pursuant to section 67A of the Act, the directors of the company or, in the case of a company having more than two directors, the majority of the directors, shall make a declaration to the effect that they have made an inquiry into the affairs of the company and, at a meeting of directors, have formed an opinion that-
(a) it is necessary for the company to buy back its own shares or to give financial assistance to a person to buy back its shares;
(b) the company is solvent as at the date of declaration and the shares buy back or the giving of financial assistance would not result in the company being insolvent or its capital being impaired; and
(c) the shares buy back or the giving of financial assistance is made in good faith and in the interests of the company.
(2) For the purpose of paragraph (1)-
(a) company shall be deemed to be solvent if it is able to pay its debts in full as and when they fall due and a company shall be deemed unable to pay its debts if it falls under any circumstances as set out under subsection 218(2) of the Act;
(b) the capital of a company shall be deemed to be impaired when the value of its assets is less than the aggregate amount of all the shares of the company after the shares buy back.
Conditions for effectiveness of declaration.
18B. A declaration made under regulation 18A shall have no effect for this purpose unless it is-
(a) made at a meeting of directors referred to in regulation 18A;
(b) made within seven days immediately preceding the shares buy back or the giving of financial assistance; and
( c) lodged with the Registrar and the Stock Exchange with a copy extended to the Securities Commission together with the notice that is required under subsection 67 A(6) of the Act.
Offence.
18C.A director who makes a declaration under regulation 18A without having reasonable ground for his opinion shall be guilty of an offence.
Adjustment to register of substantial shareholders.
18D. Where a company buys back its own shares and the shares bought back are cancelled in accordance with subsection 67 A(3) of the Act, the company shall within 3 days of the buy back make appropriate adjustments to its register of substantial shareholders kept by the company pursuant to section 69L of the resultant percentage shareholdings of each of the substantial shareholders and insert the details of every person who became a substantial shareholder as a result of the buy back.
Obligation under sections 69E and 69F deemed met by adjustment to register.
18E. Where a person became a substantial shareholder of a company or where changes occurred in the shareholding
of a substantial shareholder of the company as a result of the buy back of shares by the company, the obligation
of that person or the substantial shareholder to notify the company and the Stock Exchange, as provided under section 69E and section 69F of the Act respectively, shall be deemed to have been met by the entry of the details or adjustments in the register of substantial shareholders made in accordance with regulation l8D.
Duty to nolify substantial shareholders.
l8F. The company shall, within fourteen days of the buy back of its shares, send a notice to each of the persons whose names appear in the register of substantial shareholders to notify them of the entry or adjustments made in the register in respect of their shareholdings made in accordance with regulation l8D.".