sec.204Certain financial accommodation to officers prohibited

sec.204 Certain financial accommodation to officers prohibited

An officer of a co-operative who is not a director of the co-operative must not obtain financial accommodation from the co-operative other than— with the approval of a majority of the directors; or under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors. Maximum penalty—$24,000 or imprisonment for 2 years, or both. For the purposes of this section, financial accommodation is taken to be obtained by an officer of a co-operative if it is obtained by— a proprietary company in which the officer is a shareholder or director; or a trust of which the officer is a trustee or beneficiary; or a trust of which a corporation is trustee if the officer is a director or other officer of the corporation. A co-operative must not give financial accommodation to an officer of the co-operative if— by giving the financial accommodation, the officer would contravene this section; and the co-operative knows or should reasonably know of the contravention. Maximum penalty (for subsection (3) ): $50,000. (sec.204-ssec.1) An officer of a co-operative who is not a director of the co-operative must not obtain financial accommodation from the co-operative other than— with the approval of a majority of the directors; or under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors. Maximum penalty—$24,000 or imprisonment for 2 years, or both. (sec.204-ssec.2) For the purposes of this section, financial accommodation is taken to be obtained by an officer of a co-operative if it is obtained by— a proprietary company in which the officer is a shareholder or director; or a trust of which the officer is a trustee or beneficiary; or a trust of which a corporation is trustee if the officer is a director or other officer of the corporation. (sec.204-ssec.3) A co-operative must not give financial accommodation to an officer of the co-operative if— by giving the financial accommodation, the officer would contravene this section; and the co-operative knows or should reasonably know of the contravention. Maximum penalty (for subsection (3) ): $50,000.

• (a) with the approval of a majority of the directors; or
• (b) under a scheme about providing financial accommodation to officers that has been approved by a majority of the directors.
• (a) a proprietary company in which the officer is a shareholder or director; or
• (b) a trust of which the officer is a trustee or beneficiary; or
• (c) a trust of which a corporation is trustee if the officer is a director or other officer of the corporation.
• (a) by giving the financial accommodation, the officer would contravene this section; and
• (b) the co-operative knows or should reasonably know of the contravention.