Section 110: Purchase of shares by company

110. Purchase of shares by company (1) Where the Board of directors agrees under section 109 (2) (a) to the purchase of the shares by the company, it shall, within 7 days of issuing notice under section 109 (3)— (a) state a fair and reasonable price for the shares to be acquired; and (b) give written notice of the price to the shareholder. (2) A shareholder who considers that the price stated by the Board is not fair and reasonable, shall forthwith, but at any rate, not later than 14 days of receipt of notice under subsection (1) give written notice of objection to the company. (3) Where the shareholder does not raise an objection under subsection (2), the company shall, on such date as the company and the shareholder agree or, in the absence of any agreement, as soon as practicable, purchase all the shares at the stated price. (4) Where the shareholder gives notice of or an objection under subsection (2), the company shall— (a) refer the question of what is a fair and reasonable price to arbitration; and (b) within 7 days, pay a provisional price in respect of each share equal to the price stated by the Board. (5) At the time of payment of the provisional price under subsection (4), the shareholder shall— (a) deliver to the company an executed instrument of transfer of the shares together with any relevant share certificate; or (b) otherwise take all steps required to transfer the shares to the company. (6) Where the price determined— (a) exceeds the provisional price, the company shall forthwith pay the balance owing to the shareholder; C35 – 73 [Issue 1] Companies Act (b) is less than the provisional price paid, the company may recover the excess paid from the shareholder. (7) A reference to arbitration under this section shall be deemed to be a submission to arbitration for the purposes of the Code de Procédure Civile and the arbitration shall be dealt with in accordance with the Code de Procédure Civile. (8) The arbitrator shall expeditiously determine a fair and reasonable price for the shares on the day prior to the date on which the vote of the shareholders authorising the action was taken or the date on which written consent of the shareholders without a meeting was obtained excluding any appreciation or depreciation directly or indirectly induced by the action or its proposal, and that price shall be binding on the company and the shareholder for all purposes. (9) In the case of shares which are listed on a securities exchange, the arbitrator shall determine the price for the shares as being the price at which such shares are traded on the securities exchange as at the close of business on the day prior to the date on which the vote of shareholders authorising the action was taken or the date on which written consent of shareholders without a meeting was obtained, excluding any appreciation or depreciation directly or indirectly induced by the action or its proposal, and that value shall be binding on the company and the shareholder for all purposes. (10) The arbitrator may award interest on any balance payable or in excess to be repaid under subsection (6) at such rate as he thinks fit having regard to whether the provisional price paid or the reference to arbitration, as the case may be, was reasonable. (11) Where— (a) the company fails to refer a question to arbitration in accordance with subsection (4); or (b) the arbitrator to whom the matter is referred by the company is not independent of the company, or is not suitably all purposes. (10) The arbitrator may award interest on any balance payable or in excess to be repaid under subsection (6) at such rate as he thinks fit having regard to whether the provisional price paid or the reference to arbitration, as the case may be, was reasonable. (11) Where— (a) the company fails to refer a question to arbitration in accordance with subsection (4); or (b) the arbitrator to whom the matter is referred by the company is not independent of the company, or is not suitably qualified to conduct the arbitration, the shareholder who has given a notice of objection under subsection (2) may apply to a Judge in Chambers to appoint an arbitrator, and the Judge may appoint such person as it thinks fit to act as arbitrator for the purposes of this section. (12) A purchase of shares by a company under this section— (a) shall not be a distribution for the purposes of section 61; (b) shall be deemed to be a distribution for the purposes of section 66 (1) and (3). [S. 110 amended by Act 156 (1) (g) of Act 22 of 2005 w.e.f. 28 September 2007.] [Issue 1] C35 – 74 Revised Laws of Mauritius