Section 228, The Companies Act, 2009

(1) Where, in connection with the transfer to any personsof all or any of the shares in a company, being a transfer resulting from - (a) an offer made to the general body of shareholders; (b) an offer made by or on behalf of some other loans to directors in certain circumstances. Payment by company for loss of office etc. to be approved. Payment to director for loss of office etc. or transfer of property illegal. to disclose payment for loss of office, in cases. 164 165 body corporate with a view to the company becoming its subsidiary or a subsidiary of its holding company; (c) an offer made by or on behalf of an individual with a view to his obtaining the right to exercise or control the exercise of not less than one third of the voting power at any general meeting of the company; or (d) any other offer which is conditional on acceptance to a given extent, payment is to be made to a director of the company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, it shall be the duty of that director to do all things reasonably necessary to ensure that particulars with respect to the proposed payment and the amount, are included in or sent with any notice of the offer made for their shares which is given to any shareholders. (2) If– (a) any director referred to in subsection (1) fails to do all things reasonably necessary as mentioned in this section; or (b) any person who has been properly required by such director to include the particulars in or send them with such notice fails to do so, he shall be guilty of an offence and be liable to a fine not exceeding (3) If– (a) the requirements of subsection (1) are not complied with in relation to such payments as are mentioned in it; or (b) the making of the proposed payment is not, before the transfer of any shares in pursuance of the offer, approved at a meeting summoned by the holders of the shares to which the offer relates of the same class as any of the shares at a meeting summoned for that purpose, any sum received by the director on account of the payment shall be deemed to have been received by him in trust for any person who has sold his shares as a result of the offer made, and the expenses incurred by him in distributing that sum among those persons shall be borne by him and not retained out of that sum. (4) If, in connection with any transfer- (a) 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 same shares; (b) any valuable consideration is given to the director, the excess or 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. (5) Nothing in this section shall prejudice the operation of any rule of law requiring disclosure to be made with respect to any payments made under this section or with respect to any other like payments made, or to be made, to the directors of a company.