Financial assistance refers to the assistance given by a
company, whether directors or indirectly, for the purchase of its
own shares. The assistance may be of a variety of different types,
and includes giving a loan or guarantee, or the provision of
security.
The law seeks to prevent the assets of the company being used to
assist a third party who wishes to acquire or hold a beneficial
interest in that company. In this respect, the assets of a company
should be preserved for the benefit of that company's creditors
and the company's shareholders. In Mauritius, such financial
assistance is restricted under the Companies Act 2001 (the
"Act").
The Act provides that a company may have financial assistance
for the purpose of the acquisition of its own shares where the
company's board has previously resolved that (a) giving the
assistance is in the interests of the company, (b) the terms and
conditions on which the assistance is given are fair and reasonable
to the
