Companies (Amendment) Act, 1983

Further provisions relating to pre-emption rights.

24.—(1) Where the directors of a company are generally authorised for the purposes of section 20 , they may be given power by the articles or by a special resolution of the company to allot equity securities pursuant to that authority as if—

(a) section 23 (1) did not apply to the allotment;

or

(b) that subsection applied to the allotment with such modifications as the directors may determine;

and where the directors make an allotment under this subsection, the said section 23 shall have effect accordingly.

(2) Where the directors of a company are authorised for the purposes of section 20 (whether generally or otherwise), the company may by special resolution resolve either—

(a) that section 23 (1) shall not apply to a specified allotment of equity securities to be made pursuant to that authority; or

(b) that that subsection shall apply to the allotment with such modifications as may be specified in the resolution;

and where such a resolution is passed the said section 23 shall have effect accordingly.

(3) A power conferred by virtue of subsection (1) or a special resolution under subsection (2) shall cease to have effect when the authority to which it relates is revoked or would, if not renewed, expire, but if that authority is renewed, the power or, as the case may be, the resolution may also be renewed, for a period not longer than that for which the authority is renewed, by a special resolution of the company.

(4) Notwithstanding that any such power or resolution has expired, the directors may allot equity securities in pursuance of an offer or agreement previously made by the company, if the power or resolution enabled the company to make an offer or agreement which would or might require equity securities to be allotted after it expired.

(5) A special resolution under subsection (2), or a special resolution to renew such a resolution, shall not be proposed unless it is recommended by the directors and there has been circulated, with the notice of the meeting at which the resolution is proposed, to the members entitled to have that notice a written statement by the directors setting out—

(a) their reasons for making the recommendation;

(b) the amount to be paid to the company in respect of the equity securities to be allotted; and

(c) the directors' justification of that amount.

(6) A person who knowingly or recklessly authorises or permits the inclusion in a statement circulated under subsection (5) of any matter which is misleading, false or deceptive in a material particular shall be guilty of an offence.