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Section 170 of The Companies Act No. 17 of 2015: Exception for expenditure on defending proceedings etc

    

(1) An approval is not required under section 164, 165, 166 or 167 for anything done by a company—
(a) to provide a director of the company or of its holding company with funds to meet expenditure incurred or to be incurred by the director—
(i) in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by the director in relation to the company or an associated company; and
(ii) in connection with an application for relief; or
(b) to enable any such director to avoid incurring such expenditure, if it is done on the terms prescribed by subsection (2).
(2) The terms prescribed are—
(a) that the loan is to be repaid, or any liability of the company incurred under any transaction connected with the thing done is to be discharged, if—
(i) the director is convicted in the proceedings;
(ii) judgment is given against the director in the proceedings; and
(iii) the Court refuses to grant the director relief on the application; and
(b) that it is to be so repaid or discharged not later than—
(i) the date on which the conviction becomes final;
(ii) the date on which the judgment becomes final; or
(iii) the date on which the refusal of relief becomes final.
(3) The reference in subsection (1)(a)(ii) to an application for relief is to an application for relief under—
(a) section 426 (3) and (4) in the case of acquisition of shares by an innocent nominee; or
(b) section 1005 in the case of honest and reasonable conduct.

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Disclaimer: This document is not to be taken as legal advise.

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