Section 396 — Effect of floating charge

Where a company is being wound up,
a floating charge on the undertaking or property of the company created within one
year immediately preceding the commencement of the winding up shall, unless it
is proved that the company immediately after the creation of the charge was solvent,
be invalid except to the amount of any cash paid to the company at the time of, or
subsequently to the creation of, and in consideration for, the charge, together with
markup on that amount at the rate of five percent per annum or part thereof or such
other rate as may be notified by the Commission in the official Gazette.

OFFENCES ANTECEDENT TO OR IN COURSE OF WINDING UP