Pooled Development Funds Act 1992

PART 4 - REGULATION OF PDFs  

Division 1 - Making investments  

SECTION 21   INTENDED USE BY INVESTEE COMPANY OF MONEY INVESTED BY PDF  

21(1)   [Investment purposes]  

The PDF must believe, on reasonable grounds, that:

(aa) if the investment is covered by section 20 (shares) - the shares concerned are being, or were, issued or allotted for the sole or principal purpose of raising money; or

(ab) if the investment is covered by section 20A (options) - the money paid as consideration for the option concerned is being raised solely or principally; or

(ac) if the investment is covered by section 20B (loans) - the loan money concerned is being borrowed solely or principally;

for use in doing one or more of the following:

(a) establishing an eligible business carried on, or to be carried on, by the investee company, whether alone or together with any other person or persons;

(b) substantially expanding:

(i) the production capacity; or

(ii) the capacity to supply services;

of an established eligible business so carried on;

(c) substantially expanding existing markets, or developing substantial new markets, for goods or services supplied in the course of an established eligible business so carried on.

21(2)   [Investment authorised by PDF directors]  

If the investment is authorised by a resolution of the PDF ' s directors, the PDF is taken to believe as mentioned in subsection (1) if, and only if, each director who voted in favour of the resolution so believed when the resolution was passed.

21(3)   [Investment not authorised by PDF directors]  

If the investment is not authorised by a resolution of the PDF ' s directors, the PDF is taken to believe as mentioned in subsection (1) if, and only if:

(a) at least one of the following subparagraphs applies to each person who is a director of the PDF at the time when the investment is made:

(i) the person believes as mentioned in subsection (1) at that time;

(ii) the person believes at that time, on reasonable grounds, that a competent and reliable person:

(A) is responsible for ensuring that investments by the PDF (other than unregulated investments) are made in accordance with this Division; and

(B) is fulfilling that responsibility; and

(b) each person (whether or not an officer of the PDF) who is at that time responsible for so ensuring believes at that time, on reasonable grounds, as mentioned in subsection (1).

21(4)   [Investment re pre-owned shares]  

This section does not apply to an investment (including the acquisition of an option) that relates to pre-owned shares within the meaning of section 20 .