BL - Shares - Finance assistance

Question 1

Finance assistance: who does the prohibition on giving financial assistance to the potential buyer of its shares apply to if the target is a PUBLIC company?

Answer 1

• The target company

AND

• Any subsidiary of the target company, whether public or private

Question 2

Finance assistance: who does the prohibition on giving financial assistance to the potential buyer of its shares apply to if the target is a PRIVATE company?

Answer 2

Any public company subsidiary of the target company NOT the targeted private company itself.

Question 3

Finance assistance: What does giving financial assistance include?

Answer 3

• Gifts
• Guarantee, security or indemnity, release or waiver
• Loans or similar
• Any other financial assistance where the net assets of the company are reduced to a material extent by the giving of financial assistance.

Question 4

Financial assistance: does it matter when the financial assistance is given?

Answer 4

No, can before, at the same time, or after the acquisition.

Question 5

Financial assistance: Does it matter whether the assistance is direct or indirect?

Answer 5

No

Question 6

Financial assistance: What are the conditional exceptions

Answer 6

Private company:
- Money lending in the ordinary course of business, 🏦
- Assistance in respect of employee share schemes. 🧑‍💻👨‍💼🧑‍💼

Public company:
- Money lending in the ordinary course of business,🏦
- Assistance in respect of employee share schemes.🧑‍💻👨‍💼🧑‍💼
AND
- Net assets are not reduced unless provided for out of distributable profits.📉

Question 7

Financial Assistance: What are the consequences of carrying out prohibited financial assistance for the company/directors?

Answer 7

• Company = fine
• Directors = Fine / imprisonment.
• the transaction and share acquisition will be void