Singapore legislation

Clause 254

Civil liability for false or misleading statements

(1)

Where an offer to the public of shares in or debentures of, or units of shares in or debentures of, a corporation for subscription or purchase, or an invitation to the public to subscribe for or purchase shares in or debentures of, or units of shares in or debentures of, a corporation is made in or accompanied by a prospectus or profile statement and —

(a)

a false or misleading statement or matter is contained in —

(i)

the prospectus or the profile statement; or

(ii)

any application form for the shares or debentures, or units of shares or debentures;

(b)

there is an omission to state any information required to be disclosed under section 243 or 244, where applicable, in respect of the prospectus, or under section 246 in respect of the profile statement; or

(c)

there is an omission to state a new circumstance that —

(i)

has arisen since the prospectus or the profile statement was lodged; and

(ii)

would have been required by section 243 or 244, where applicable, to be included in the prospectus, or by section 246 to be included in the profile statement, if it had arisen before the prospectus or the profile statement was lodged with the Authority,the persons referred to in subsection (3) shall be liable to compensate any person who suffers loss or damage as a result of the false or misleading statement in or omission from the prospectus or the profile statement, even if such persons, unless otherwise specified, were not involved in the making of the false or misleading statement or the omission.

(2)

For the purposes of subsection (1), a false or misleading statement about a future matter (including the doing of, or the refusal to do, an act) is taken to have been made if a person makes the statement without having reasonable grounds for making the statement.

(3)

The persons liable are —

(a)

the person making the offer or invitation;

(b)

if the offer or invitation is made by a corporation, each director of the corporation making the offer or invitation;

(c)

if the offer or invitation is made by a corporation, a person named in the prospectus or the profile statement with his consent as a proposed director of the corporation;

(d)

an underwriter (but not a sub-underwriter) to the issue or sale of the shares or debentures, or units of shares or debentures, named in the prospectus or the profile statement with his consent;

(e)

a person named in the prospectus or the profile statement with his consent as having made a statement —

(i)

that is included in the prospectus or the profile statement; or

(ii)

on which a statement made in the prospectus or the profile statement is based,but only in respect of the inclusion of that statement; and

(f)

any other person who made the false or misleading statement or omitted to state the information or circumstance, as the case may be, but only in respect of the inclusion of the statement or the omission to state the information or circumstance.

(4)

A person who acquires shares, debentures, or units of shares or debentures as a result of an offer or invitation that was made in or accompanied by a profile statement is taken to have acquired the shares or debentures, or units of shares or debentures, in reliance on both the profile statement and the prospectus for the offer.

(5)

No action under subsection (1) shall be commenced after the expiration of 6 years from the date on which the cause of action arose.

(6)

This section does not affect any liability that a person has under any other law.

Read in full context — Securities and Futures Bill →