Section 744 of The Companies Act No. 17 of 2015: Failure to re-appoint auditor: special notice required for resolution at general meeting
(1) In this section, “outgoing auditor”—
(a) in relation to a private company—means the auditor of the company whose term of office ended, or is to end, at the end of the period for appointing auditors; and
(b) in relation to a public company—means the auditor whose term of office has ended, or is to end, at the next general meeting of the company at which a financial statement of the company is to be presented
(2) This section applies to a resolution at a general meeting of a company whose effect would be to appoint a person as auditor in place of the outgoing auditor.
(3) Special notice is required of a resolution to which this section applies if—(a) in the case of a private company—
(i) the period for appointing auditors has not ended since the outgoing auditor ceased to hold office; or
(ii) such a period has ended and an auditor should have been appointed but was not; or
(b) in the case of a public company—
(i) since the outgoing auditor ceased to hold office no general meeting has been held at which a financial statement of the company was presented; or
(ii) a general meeting of the company has been held at which an auditor should have been appointed but was not.
(4) As soon as practicable after receiving notice of such a proposed resolution, the company shall send a copy of it to the person proposed to be appointed and to the outgoing auditor.
(5) Within fourteen days after receiving notice of the proposed resolution, the outgoing auditor may—
(a) make written representations with respect to the proposed resolution, not exceeding two thousand words; and
(b) request the company to send a copy of the representations to the company's members.
(6) The company shall—
(a) in any notice of the resolution given to members of the company, state that the representations have been made; and
(b) send a copy of the representations to every member of the company to whom notice of the meeting is or has been sent.
(7) The company is not required to send copies of the representations to the members if the members would not receive their copies of the representations before the beginning of the meeting.
(8) If a copy of any such representations is not sent out as required because it was received too late or because of the company's default, the outgoing auditor may require the representations to be read out at the meeting.
(9) If a company fails to comply with subsection (4) or (6), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings
(10) If the company or a person affected claims that the representations made by the auditor contain defamatory matter, the company or person may apply to the Court for an order under subsection (12).
(11) The auditor is entitled to be served with a copy of such an application and to be heard at the hearing of the application by the Court.
(12) On the hearing of such an application, the Court shall, if satisfied that the representations of the auditor contain defamatory matter, make an order to the effect that those representations need neither to be sent to the company's members nor to be read out at the meeting, but if not so satisfied, it shall dismiss the application.
(13) If the Court has made an order under subsection (12)—
(a) copies of the auditor's representations need not be sent out to the company's members; and
(b) those representations need not be read out at the meeting.
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