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Dealing by finance company in its own shares, etc.

Finance Companies Act 1967

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—(1) Except as is otherwise expressly provided by this Act, a finance company must not give, directly or indirectly and whether by means of a loan guarantee or the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of, or for, any shares in the finance company or, where such company is a subsidiary, in its holding company, or in any way purchase, deal in or lend money on its own shares.(2) Nothing in subsection (1) prohibits —(a)the provision by a finance company, in accordance with any scheme for the time being in force, of money to purchase or subscribe for fully‑paid shares in the finance company or its holding company, being a purchase or subscription by trustees of or for shares to be held by or for the benefit of employees of the company, including any director holding a salaried employment or office in the company; or(b)the giving of financial assistance by a finance company to persons, other than directors, bona fide in the employment of that company or of a subsidiary of that company with a view to enabling those persons to purchase fully‑paid shares in the finance company to be held by themselves by way of beneficial ownership.(3) If there is any contravention of this section, the finance company and every officer of that company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months.(4) Nothing in this section operates to prevent the finance company from recovering the amount of any loan made in contravention of this section or any amount for which it becomes liable on account of any financial assistance given in contravention of this section.

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