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Loans to directors, etc.
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43.—(1) Every annual return of a society submitted to the Registrar under section 70 shall contain particulars showing the amount of any loan made by the society during the financial year to which the return relates to—
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(a) any director of the society,
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(b) any person who after the making of the loan became during that financial year a director of the society,
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(c) any member of the family of an officer where that member is not a full-time employee of the society, and
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(d) any body corporate in relation to which, when the loan was made or at any later time in that financial year, an officer of the society or a member of his family—
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(i) held, either directly or through a nominee, shares to a nominal value exceeding 20 per cent of the shares of the body corporate, or
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(ii) was a director, manager or secretary of the body corporate,
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and giving particulars of his shareholding in the body corporate.
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(2) The accounts required under section 60 to be laid before the annual general meeting of a society shall contain particulars showing the amount of any loan made during the financial year to which the accounts relate to any officer or a member of the family of an officer where that member is not a full-time employee of the society—
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(a) exceeding such amount as may be fixed by the Registrar for the purposes of this section, or
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(b) for any purpose other than a purpose approved by the Registrar for the purposes of this section.
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(3) (a) Where a society approves a loan in favour of a member of the family of an officer where that member is not a full-time employee of the society, the terms applicable to the loan shall not be in any respect more favourable than those applicable to other loans of a like amount made by the society for a similar purpose at the time when the first-mentioned loan is paid.
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(b) In this subsection “terms” means the interest rate applicable to the loan, the percentage which the loan represents of the estimated value of the property mortgaged as security for the loan and the period during which the loan is repayable.
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(4) It shall be the duty of every officer of a society to give notice in writing to the society as soon as may be of such matters relating to himself and members of his family as may be necessary for the purposes of this section and of section 44.
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(5) Where notice under subsection (4) is given otherwise than at a meeting of directors, the officer giving it shall take reasonable steps to secure that it is brought up and read at the next meeting of the directors after it is given.
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(6) In any proceedings against an officer in respect of an offence under this section, it shall be a defence to prove that at the time of the alleged offence he did not know that the society had made the loan concerned to the other person or body corporate concerned and that at that time reasonable arrangements were in operation to bring to his notice any loan of a kind referred to in subsections (1) to (3).
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(7) Where the requirements of this section are not complied with, it shall be the duty of the auditor of the society to include in his report on the annual return or the annual accounts (as the case may be) a note of such non-compliance and, so far as he is reasonably able to do so, a statement giving the relevant particulars required by this section.
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