Section 434 of The Companies Act No. 17 of 2015: Transfer to reserve on acquisition of shares by public company ornominee
(1) If—
(a) a public company, or a nominee of a public company, acquires shares in the company; and
(b) those shares are shown in a balance sheet of the company as an asset,
the company shall transfer to a reserve account from profits available for the
payment of dividends an amount equal to the value of the shares.
(2) The company shall not distribute the amounts so transferred.
(3) Subsection (1) applies to an interest in shares as it applies to shares andas it so applies the reference to the value of the shares is a reference to the value to the company of its interest in the shares.
(4) If a company contravenes subsection (1) or (2), the company, and eachofficer of the company who is in default, commit an offence.
(5) A company found guilty of an offence under section (4) is liable on convictionto a fine not exceeding one million shillings.
(6) An officer of a company who is found guilty of an offence under subsection (4) is liable on conviction to a fine not exceeding five hundred thousand shillings.
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