The United Kingdom was the first to introduce the prohibition for companies to give financial assistance for the purchase of their shares. I was also one of the first to produce legislation ameliorating the problems created by such a prohibition. This study of Commonwealth jurisdictions around the Pacific Rim illustrates the extent to which the prohibition of financial assistance was mirrored. Commonwealth legislatures on the Pacific Rim provide a useful range of legislative responses in this regard. Some appear not to recognise any problem exists with financial assistance; some others have produced workable legislation protecting the interests of the company and shareholders but may not provide adequate protection for creditors, and so on. This article considers the difficulties experienced by jurisdictions in extricating themselves from the original prohibition, as well as some attempts to develop practical solutions to the financial assistance problem. It also queries whether adequate regard is given to the interests of creditors.
Document Type: Research Article
Publication date: January 1, 2006
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The Oxford University Commonwealth Law Journal (OUCLJ) is the flagship journal of Oxford University's postgraduate law community, produced under the aegis of the Law Faculty. It is published twice-yearly and endeavours to foster international academic debate and exchange on a wide range of legal topics of interest throughout the Commonwealth.