Liability for matters contained in prospectus

Liability for matters contained in prospectus

(1) It shall be the duty and obligation of the concerned company to abide by the matters contained in the prospectus published under Section (23).

(2) The directors who have signed the prospectus as referred to in Sub-section(1) shall be liable for the matters mentioned in that prospectus.

(3) If any published prospectus contains false statements made maliciously or deliberately and any person sustains any loss or damage by reason of his/her subscription of securities on the faith of that prospectus, the directors who have signed that prospectus shall be personally liable to pay compensation for the actual loss or damage so sustained.

                 Provided, however, that a promoter who resigns before the decision made by the company to publish the prospectus or whom on becoming aware of any false statement in the prospectus, publishes a notice of that matter to the information of the general public prior to the sale or allotment of securities or who proves that he/she did not know that the prospectus contained any false statement shall not be liable to bear such compensation.