THE COMPANIES ORDINANCE, 1972

Notice of derivative interests in shares and debentures

110.—(1) A company shall not be affected by notice of any derivative interest in any shares or debentures issued by it, and shall not enter particulars, or a note of the existence or alleged existence, of such a derivative interest in its register of members or its register of debenture holders, except as required by this section.

(2) Any person who claims to be entitled to a derivative interest in any shares or debentures (except shares or debentures represented by bearer share certificates or bearer debentures) may serve a written notice thereof on the company (in this section called "a notice of interest") accompanied by a signed declaration made by him setting out the nature of the interest he claims, and affirming that he honestly and truly believes that he is entitled to that interest and that it is valid and subsisting.

(3)  Any person in whose favour the court has made an order declaring that he is entitled to a derivative interest in any shares or debentures (except shares or debentures represented by bearer share certificates or bearer debentures), or an order imposing a charge on any shares or debentures (except as aforesaid), may serve a copy of the order of the court on the company.

(4)  A company which has received a notice of interest under subsection (2) or a copy of an order of the court under subsection (3) shall : —

(a)   forthwith enter a note of the fact in its register of members or debenture holders (as the case may be) against the last entry made in respect of each of the shares or debentures to which the notice of interest or order relates ;

(b)   include a statement that such a note has been entered in all certifications of transfers of any of the said shares or debentures which it subsequently issues ; and

(c)   give written notice to the person who served the notice of interest or copy of the order of the court, at an address in Seychelles furnished by him in writing for the purpose, of the presentation to it for registration of any transfer of any of the said shares or debentures at least fourteen days before registering the same in its register of members or debenture holders (as the case may be).

(5)  If the person who served the notice of interest or copy of the order of the court, or any person deriving title under him, applies to the court to restrain the registration of a transfer of the shares or debentures mentioned therein within fourteen days after the company gives written notice to him that the transfer has been presented for registration, and serves upon the company a copy of the plaint or other process by which the application is made before the expiration of that time, the company shall not register the transfer unless directed to do so by the court

(6)  On the hearing of an application under subsection (5) the court may decide any question relating to the title or interest of any person, may order the company to rectify the register or to register a transfer presented to it, and may order the shares or debentures to be sold, as the circumstances of the case may require.

(7)  If a person acquires an interest in good faith and for money or money's worth in any shares or debentures itt reliance on a certification of a transfer issued by a company which does not contain a statement that a notice of interest or an order of the court has been Served on the company in respect of the shares or debentures to which the transfer relates, the company shall be liable to him in damages for any consequential loss which he suffers.

(8)  If a company fails to give written notice to a person who has served a notice of interest or a copy of an order of the court on it in compliance with paragraph (c) of sub-section (4), or if a company registers a transfer of shares or debentures before the expiration of the period of fourteen days mentioned in that paragraph, or before the disposal of any application made to the court under subsection (5) (otherwise than on the direction of the court), the company shall be liable to that person in damages for any consequential loss which he suffers.

(9)  This section shall not apply to a proprietary Compaq except in respect of orders made by the Registrar under section 194 and in respect of warrants of execution issued under section 245 of the Seychelles Code of Civil Procedure in relation to shares or debentures issued by the company.

(10)  This section shall apply to derivative interests ia shares and debentures created before or after the coming into force of this Ordinance.

(11)  Article 1690 of the Civil Code shall not apply in respect of derivative interests in shares or debentures.