Companies Act, 1990

Power to impose restrictions on shares or debentures.

16.—(1) Where in connection with an investigation or enquiry under section 14 or 15 it appears to the Minister that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), the Minister may by notice in writing direct that the shares shall until further notice be subject to the restrictions imposed by this section.

(2) So long as a direction under subsection (1) in respect of any shares is in force—

(a) any transfer of those shares, or in the case of unissued shares any transfer of the right to be issued therewith and any issue thereof, shall be void;

(b) no voting rights shall be exercisable in respect of those shares;

(c) no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder thereof; and

(d) except in a liquidation, no payment shall be made of any sums due from the company on those shares, whether in respect of capital or otherwise.

(3) Where shares are subject to the restrictions imposed by subsection (2) (a) any agreement to transfer the shares or in the case of unissued shares the right to be issued with the shares shall be void except an agreement to sell the shares pursuant to subsection (6) (b).

(4) Where shares are subject to the restrictions imposed by subsection (2) (c) or (2) (d) any agreement to transfer any right to be issued with other shares in right of those shares or to receive any payment on those shares (otherwise than in a liquidation) shall be void except an agreement to transfer any such right on the sale of the shares pursuant to subsection (6) (b).

(5) Where the Minister directs that shares shall be subject to the said restrictions, or refuses to direct that shares shall cease to be subject thereto, any person aggrieved thereby may apply to the court for an order that the shares shall cease to be subject thereto.

(6) Subject to subsections (7) and (13), an order of the court or a direction of the Minister that shares shall cease to be subject to the restrictions imposed by this section may be made only if—

(a) the court or, as the case may be, the Minister is satisfied that the relevant facts about the shares have been disclosed to the company and no unfair advantage had accrued to any person as a result of the earlier failure to make that disclosure; or

(b) the shares are to be sold and the court or the Minister approves the sale.

(7) Where any shares in a company are subject to the restrictions imposed by this section, the court may on the application of the Minister or the company order the shares to be sold, subject to the approval of the court as to the sale, and may also direct that the shares shall cease to be subject to those restrictions.

(8) Where an order has been made under subsection (7) then, on application of the Minister, the company, the person appointed by or in pursuance of the order to effect the sale or any person interested in the shares, the court may make such further order relating to the sale or to the transfer of the shares as it thinks fit.

(9) Where any shares are sold in pursuance of an order made under subsection (7), the proceeds of sale, less the costs of the sale, shall be paid into court for the benefit of the persons who are beneficially interested in the shares; and any such person may apply to the court for the whole or part of those proceeds to be paid to him.

(10) On an application under subsection (9) the court shall, subject to subsection (11), order the payment to the applicant of the whole of the proceeds of sale together with any interest thereon or, if any other person had a beneficial interest in the shares at the time of their sale, such proportion of those proceeds and interest as is equal to the proportion which the value of the applicant's interest in the shares bears to the total value of the shares.

(11) On granting an application for an order under subsection (7) or (8), the court may order that the costs of the applicant shall be paid out of the proceeds of sale; and, where an order under this subsection is made, the applicant shall be entitled to payment of his costs out of the proceeds of sale before any person interested in the shares in question receives any part of those proceeds.

(12) Any order or direction that shares shall cease to be subject to the said restrictions which is expressed to be made or given with a view to permitting a transfer of those shares or which is made under subsection (7) may continue the restrictions mentioned in subsection (2) (c) and (2) (d) in whole or in part, so far as they relate to any right acquired or offer made before the transfer.

(13) Subsection (6) shall not apply in relation to any order of the court or of the Minister directing that shares shall cease to be subject to any restrictions which have been continued in force in relation to those shares by virtue of subsection (12).

(14) Any person who—

(a) exercises or purports to exercise any right to dispose of any shares which, to his knowledge, are for the time being subject to the said restrictions or of any right to be issued with any such shares; or

(b) votes in respect of any such shares, whether as holder or proxy, or appoints a proxy to vote in respect thereof; or

(c) being the holder of any such shares, fails to notify of their being subject to the said restrictions any person whom he does not know to be aware of that fact but does know to be entitled, apart from the said restrictions, to vote in respect of those shares whether as holder or proxy; or

(d) being the holder of any such shares, or being entitled to any such right as is mentioned in subsection (4) enters into an agreement which is void by virtue of subsection (3) or (4);

shall be guilty of an offence.

(15) Where shares in any company are issued in contravention of the said restrictions, the company and every officer of the company who is in default shall be guilty of an offence.

(16) Summary proceedings shall not be instituted under this section except by or with the consent of the Minister.

(17) This section shall apply in relation to debentures as it applies in relation to shares.

(18) The Minister shall cause notice of any direction given by him under this section—

(a) to be sent to the company concerned at its registered office, and

(b) to be delivered to the registrar of companies,

(c) to be published in Iris Oifigiúil and in at least two daily newspapers,

as soon as may be after the direction is given.