Section 85: Civil liability for mis-statements in prospectus.

(1) Where a prospectus invites persons to subscribe for shares in a company, the persons referred to in subsection (2) of this section shall be liable to pay compensation to all persons who subscribe for shares or debentures relying on the prospectus for the loss or damage they may have sustained by reason of any untrue statement or mis-statement included in it.
(2) A person liable to pay compensation under subsection (1) of this section includes:
(a) any director of the company at the time of the issue of the prospectus;
(b) any person who consented to be named and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time;
(c) any employee of the company who participated in or facilitated the production of the prospectus; and
(d) the issuing house and its principal officers.
(3) Where under section 77 of this Act the consent of a person is required to the issue of a prospectus and he has given that consent he shall not by reason only of his having given the consent be liable under this section as a person who has authorised the issue of prospectus except in respect of an untrue statement or mis-statement purported to be made by him as an expert.
(4) No person shall be liable under subsection (1) of this section if he proves;
(a) that, having consented to become a director of the company, he withdrew his consent in writing before the issue of the prospectus, and that it was issued without his authority or consent;
(b) that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue, he immediately gave reasonable public notice that it was issued without his knowledge or consent;
(c) that, after the issue of the prospectus and before allotment, he, on becoming aware of any untrue statement or mis-statement in it, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason for his withdrawal; or
(d) that, as regards every untrue statement or mis-statement:
(i) not purporting to be made on the authority of an expert, or of an official public document or statement, he had reasonable ground to believe and did up to the time of the allotment of the shares, as the case may be, believe that the statement was true,
(ii) purporting to be a statement by an expert or contained in what purports to be a copy of or an extract from a report or valuation of an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation and he had reasonable ground to believe and did up to the time of the issue of the prospectus believe that the person making the statement was competent to make it and that person had given the consent required by section 77 of this Act to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration, and
(iii) purporting to be a statement made by an official person or contained in what purports to be a copy of or an extract from an official public document, it was a correct and fair representation of the statement or copy of or extract from the document.
(5) The provisions of subsection (4) of this section shall not apply in the case of a person liable by reason of his having given a consent required of him by section 77 of this Act as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert.
(6) A person who, apart from this subsection, would under subsection (1) of this section be liable, by reason of his having given a consent required of him by section 60 of this Act as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert, shall not be so liable if he proves that:
(a) having given his consent under section 77 of this Act to the issue of the prospectus, he withdraws it in writing before delivery of a copy of the prospectus for registration; or
(b) after delivery of a copy of the prospectus for registration and before allotment he, on becoming aware of the untrue statement or mis-statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason for his withdrawal; or
(c) he was competent to make the statement and that he had reasonable ground to believe and did, up to the time of the allotment of the shares, believe that the statement was true.
(7) Where:
(a) the prospectus contains the name of a person as a director of the company or as having agreed to become a director of the company and he has not consented to become director, or has withdrawn his consent in writing before the issue of the prospectus, and has not authorised or consented to such issue; or
(b) the consent of a person is required under section 77 of this Act to the issue of the prospectus and he either has not given the consent or has withdrawn it before the issue of the prospectus;
(c) the directors of the company, except a director without whose knowledge or consent the prospectus was issued, and any other person who authorised such issue, commits of an offence and is liable to indemnify the person so named or whose consent was so required, as the case may be against all damages, costs and expenses to which he may be made liable by reason of his name having been inserted in the prospectus or of the inclusion in the prospectus of a statement purporting to be made by him as an expert, as the case may be, or in defending himself against any action or legal proceeding brought against him in respect of the issue of the prospectus or the inclusion in the prospectus of the statement.
(8) A person shall not be deemed for the purpose of this subsection to have authorised the issue of a prospectus by reason only of his having given the consent required by section 77 of this Act to the inclusion in it of a statement purporting to be made by him as an expert.