Section 149: Avoidance of transactions

149. Avoidance of transactions (1) A transaction entered into by the company in which a director of the company is interested may be avoided by the company at any time before the expiration of 6 months after the transaction is disclosed to all the shareholders (whether by means of the company’s annual report or otherwise). (2) A transaction shall not be avoided where the company receives fair value under it. (3) For the purpose of subsection (2), the question as to whether a company receives a fair value under a transaction shall be determined on the basis of the information known to the company and to the interested director at the time the transaction is entered into. (4) Where a transaction is entered into by the company in the ordinary course of its business and on usual terms and conditions, the company shall be presumed to have received a fair value under the transaction. (5) For the purpose of this section— (a) a person seeking to uphold a transaction and who knew or ought to have known of the director’s interest at the time the transaction was entered into shall have the onus of establishing a fair value; and (b) in any other case, the company shall have the onus of establishing that it did not receive a fair value. (6) A transaction in which a director is interested shall only be avoided on the ground of the director’s interest in accordance with this section or the company’s constitution.