169Entitlements of former shareholders on mergers etc

169 Entitlements of former shareholders on mergers etc

(1) This section applies when a person’s shares in a co-operative (the original co-operative) are forfeited under this Part and within 2 years after the forfeiture:

(a) another co-operative (the new co-operative) is created because of a merger under Part 4.3 involving the original co-operative; or

(b) the engagements of the original co-operative are transferred to another co-operative (the new co-operative) under Part 4.3.

(2) A person referred to in subsection (1) is, for the purposes of section 168 (and the further operation of this section), taken to have held shares in the new co-operative and as having had those shares in the new co-operative forfeited under this Part when the person’s shares in the original co-operative were forfeited.

(3) The extent of the forfeited shareholding in the new co-operative is decided as follows:

(a) if the entitlement of active members of the original co-operative in the circumstances concerned is solely an entitlement to be allotted shares in the new co-operative—the forfeited shareholding in the new co-operative is the shareholding to which the person would have been entitled had the person’s shares in the original co-operative not been forfeited;

(b) in any other case—the forfeited shareholding in the new co-operative is the shareholding that is the same in all respects as the forfeited shareholding in the original co-operative.

(4) The decision under subsection (3) (a) of the person’s shareholding in the new co-operative must be made:

(a) solely on the basis of the person’s shareholding in the original co-operative when the shares were forfeited or (in a further operation of this section to the person) when the person was first taken to have a forfeited shareholding in the original co-operative; and

(b) without regard to any additional shareholding in the original co-operative to which the person would have become entitled had the shares not been forfeited (whether because of any bonus share issue or otherwise).