Railway and Canal Traffic Act 1888

42 Misapplication of a railway company's funds for acquisition of unauthorised interest in canal

(1) No railway company, or director, or officer of a railway company shall, without express statutory authority, apply or use or authorise or permit the application or use of any part of the company's funds for the purpose of acquiring either in the name of the railway company, or of any director or officer of the railway company, or other person, any canal interest, or of enabling any director or officer of the railway company, or other person, to purchase or acquire any canal interest, or of guaranteeing or repaying to any director or officer of the railway company or other person who has purchased or acquired any canal interest the sums of money expended or liability incurred by such director, officer, or person, in the purchase or acquisition of such canal interest, or any part of such money or liability.

(2) In the event of any contravention of the provisions of this section, the canal interest purchased in such contravention shall be forfeited to the Crown, and the directors or officers of the company who so applied or used, or authorised or permitted such application or use of the company's funds, shall be liable to repay to the company the sums so applied or used and the value of the canal interest so forfeited; and proceedings to compel such repayment may be taken by any shareholder in the company.

(3) In this section the expression " company's funds " means the corporate funds of any railway company, and includes any funds which are under the control of or administered by a railway company ; the expression " officer" includes any person having any control over a company's funds or any part thereof; and the expression " canal interest" means shares in the capital of a canal company, and includes any interest of any kind in a canal company or canal.