Section 348 of The Companies Act No. 17 of 2015: Disapplication of pre-emption rights by special resolution
(1) If the directors of a company are authorised for the purposes of section 329 (whether generally or otherwise), the company may by special resolution resolve that section 338—
(a) does not apply to a specified allotment of equity securities to be made in accordance with that authorisation; or
(b) applies to such an allotment with such modifications as may be specified in the resolution.
(2) If such a resolution is passed, this section has effect accordingly.
(3) A special resolution under this section ceases to have effect when the authorisation to which it relates—
(a) is revoked; or
(b) would if not renewed expire.
(4) However, if the authorisation is renewed, the resolution may also be renewed by a special resolution of the company for a period not longer than that for which the authorisation is renewed.
(5) The directors may, even though such a resolution has expired, allot equity securities in accordance with an offer or agreement previously made by the company if the resolution enabled the company to make an offer or agreement that would or might require equity securities to be allotted after it expired.
(6) A special resolution under this section, or a special resolution to renew such a resolution, may not be proposed unless—
(a) it is recommended by the directors; and
(b) the directors have complied with the following provisions.
(7) Before such a resolution is proposed, the directors shall make a written statement 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.
(8) The directors shall ensure that their statement is—
(a) if the resolution is proposed as a written resolution, sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him; or
(b) if the resolution is proposed at a general meeting, circulated to the members entitled to notice of the meeting with that notice.
(9) If the directors fail to comply with subsection (7) or (8), each of the directors who is in default commits and offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.
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