Section 157: Restrictions on share dealing by directors

157. Restrictions on share dealing by directors (1) Where a director of a company in his capacity as a director or an employee of the company or a related company, has information which is material to an assessment of the value of shares or other securities issued by the company or a related company, being information that would not otherwise be available to him, the director may acquire or dispose of those shares or securities only where— (a) in the case of an acquisition, the consideration given for the acquisition is not less than the fair value of the shares or securities; or (b) in the case of a disposition, the consideration received for the disposition is not more than the fair value of the shares or securities. (2) For the purposes of subsection (1), the fair value of shares or securities is to be determined on the basis of all information known to the director or publicly available at the time. (3) Subsection (1) shall not apply in relation to a share or security that is acquired or disposed of by a director only as a nominee for the company or a related company. (4) Where a director acquires shares or securities in contravention of subsection (1) (a), the director shall be liable to the person from whom the shares or securities were acquired for the amount by which the fair value of the shares or securities exceeds the amount paid by the director. (5) Where a director disposes of shares or securities in contravention of subsection (1) (b), the director shall be liable to the person to whom the shares or securities were disposed of for the amount by which the consideration received by the director exceeds the fair value of the shares or securities. (6) This section shall not apply in relation to a listed company. [S. 157 amended by s. 156 (1) (i) of Act 22 of 2005 w.e.f. 28 September 2007.] C35 – 101 [Issue 1] Companies Act Sub-Part F – Miscellaneous Provisions relating to Directors