Section 162 of The Companies Act No. 17 of 2015: Property transactions: civil consequences of contravening section 159
(1) An arrangement entered into by a company in contravention of section 158 and any transaction entered into in accordance with the arrangement (whether by the company or any other person) is voidable at the instance of the company, unless—
(a) restitution of any money or other asset that was the subject matter of the arrangement or transaction is no longer possible;
(b) the company has been indemnified in accordance with this section by other persons for the loss or damage suffered by it; or
(c) rights acquired in good faith, for value and without actual notice of the contravention by a person who is not a party to the arrangement or transaction would be affected by the avoidance.
(2) Whether or not the arrangement or any such transaction has been avoided, each of the persons specified in subsection (3) is liable—
(a) to account to the company for any gain that the person has made (directly or indirectly) as a result of the arrangement or transaction; and
(b) jointly and severally with any other person so liable under this section, to indemnify the company for any loss or damage resulting from the arrangement or transaction.
(3) The persons so liable are—
(a) any director of the company or of its holding company with whom the company entered into the arrangement in contravention of section 158;
(b) any person with whom the company entered into the arrangement in contravention of that section who is connected with a director of the company or of its holding company;
(c) the director of the company, or of its holding company, with whom any such person is connected; and
(d) any other director of the company who authorised the arrangement, or a transaction entered into in accordance with such an arrangement.
(4) Subsections (2) and (3) are subject to subsections (5) and (6).
(5) A director of a company, or of its holding company, is not, in relation to an arrangement entered into by the company in contravention of section 158 with a person connected with the director, liable because of subsection (3)(c) if the director shows that all reasonable steps were taken by the director to ensure that the company did not contravene that section.
(6) Deleted by Act No. 28 of 2017, s. 16(a).
(7) Deleted by Act No. 28 of 2017, s. 16(b).
(8) This section does not preclude the operation of any other enactment or rule of law under which the arrangement or transaction could be questioned, or any liability to the company could arise.
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