148. Provisions as to payments received by directors for loss of office or on retirement

It is hereby declared that it is not lawhl in connection with the transfer of the whole or any part of the undertaking or property of a company for any payment to be made to any director of the company by way of compensation for loss of ofice, or as consideration for or in connection with his retirement £i-om ofice, unless particulars with respect to the proposed payment, including the amount thereof, have been disclosed to the members of the company and the proposal approved by the company.

Where a payment which is hereby declared to be illegal is made to a director of the company, the amount received is deemed to have been received by him in trust for the company.

Where a payment is to be made as aforesaid to a director of a company in connection with the transfer to any persons, as a result of an offer made to the general body of shareholders, of all or any of the shares in the company, it shall be the duty of that director to take all reasonable steps to secure that particulars with respect to the proposed payment, including the amount thereof, shall be included in or sent with any notice of the offer made for their shares which is given to any shareholders.

If any such director fails to take reasonable steps as aforesaid, or if any person who has been properly required by any such director to include such particulars in or send them with any such notice fails so to do, he is guilty of an offence and liable on conviction to a fine of $1,000, and if the requirements of subsection (3) are not complied with in relation to any such payment as is mentioned in that subsection, any sum received by the director on account of the payment is deemed to have been received by him in trust for any persons who have sold their shares as a result of the offer made.

If in connection with any such transfer, the price to be paid to a director of the company whose office is to be abolished or who is to retire from office for any shares in the company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares or any valuable consideration is given to any such director, the excess of the money value of the consideration, as the case may be, shall, for the purposes of this section, be deemed to have been a payment made to him by way of compensation for loss of office or as consideration for or in connection with his retirement from office.

Nothing in this section shall be taken to prejudice the operation of any rule of law requiring disclosure to be made with respect to any such payments as are mentioned in this section or with respect to any a other like payments made or to be made to the directors of a company.