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LENDING AND FINANCIAL ASSISTANCE TO DIRECTORS

“Financial assistance” in Sections 44 and 45 excludes lending money in the ordinary
course of business by a company whose primary business is the lending of money, and
additionally in re Section 45, includes the lending money, guaranteeing a loan or other
obligation and securing any debt or obligation, but excludes an accountable advance
to meet company-related legal expenses or anticipated expenses to be incurred by the
person on behalf of the company or an amount to defray the person’s expenses from
removal at the company’s request.
Section 44: Financial Assistance for Subscription of Securities
Unless a company’s MOI provides otherwise, the board may authorise the company to
provide financial assistance by way of a loan, guarantee, the provision of security or
otherwise to any person for the purpose of or in connection with the subscription of any
option, or any securities, issued or to be issued by the company or a related or inter-
related company or for the purchase of any securities of the company or a related or
inter-related company (subject to certain conditions), which are outlined below*.
Section 45: Financial Assistance
Unless a company’s MOI provides otherwise, the board may authorise the company
to provide direct or or indirect financial assistance to a director or prescribed officer of
the company or of a related or inter-related company, or to a related or inter-related
company or CC, or to a member of a related or inter-related CC, or to a person related
to any such company, CC, director, prescribed officer or member, subject to specific
conditions as per below*.
If the board adopts a resolution to provide financial assistance, written notice must be
given to all shareholders (unless every shareholder is also a director of the company),
and to any trade union representing its employees:
■ Within ten business days after the board adopts the resolution, if the total value of
all loans, debts, obligations or assistance together with any previous such resolution
during the financial year, exceeds one-tenth of 1% of the company’s net worth at the
time of the resolution, or
■ Within 30 business days after the end of the financial year, in any other case.
* Conditions to be met (Sections 44 and 45):
The provision of financial assistance is only possible where the board has authorised it
by way of resolution, but the board may not pass such a resolution unless it is pursuant
to an employee share scheme that satisfies the requirements of S97, OR – in any other
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