Cross-holdings

72. (1) A company which is a subsidiary of another

company (referred to in this section as the “holding company”) —

(a) shall not acquire shares in the holding company;

(b) may continue to hold any shares in the holding company acquired by the subsidiary before it became a subsidiary of the holding company, but may not exercise any right to vote which is attached to those shares.

(2) Nothing in subsection (1) shall apply to a company which —

(a) holds shares in the holding company only as a trustee or legal representative and has no beneficial interest in the shares; or

(b) holds an interest in shares in the holding company by way of security for the purposes of a transaction entered into by it in the ordinary course of business and on usual terms and conditions.

(3) Where a body corporate —

(a) became a holder of shares in the holding company before the commencement of this Act, it may continue to be a member of that company, but it has no right to vote in respect of those shares at any meetings of the company; and

(b) is permitted to continue as a member of the holding company by virtue of paragraph (b) of subsection

(1) and paragraph (a) of this subsection, an allotment of fully paid shares in the company may be validly made by way of capitalisation of reserves of the company, which shares also will have no right to

 (4) The provisions of subsections (1), (2) and (3) shall apply in relation to a nominee for a company which is a subsidiary, as if a reference to the company were a reference to the nominee.