(1) Except under rules prescribed by the commission, a public utility may not lend funds or credit to any of its officers or directors by any of the following and a public utility other than a telecommunications utility may not lend funds or credit to any corporation, except a public utility subject to the regulatory powers of the commission, if the corporation holds, directly or indirectly through any chain of ownership, 5 percent or more of the voting stock of the public utility or renders any managerial, supervising, engineering, legal, accounting or financial service to the public utility by any of the following: (a) Becoming surety, guarantor or endorser upon any obligations, contingent or otherwise, of the officer, director or corporation. (b) Loaning funds, securities or other like assets to the officer, director or corporation. (c) Purchasing in the open market, or otherwise, any obligation upon which the officer, director or corporation may be liable solely or jointly with others. (2) Any contract made in violation of this section shall be void and subject to cancellation and recoupment by action at law. If a contract is made contrary to the provisions of this section, the commission, after notice and hearing, may order the public utility to take steps within 30 days to recover the funds or assets thus illegally loaned or transferred by action at law or other proceedings which will effectively release the public utility from the contract as surety, guarantor or endorser. (3) Any director, treasurer or other officer or agent of a public utility who makes or votes to authorize a transaction in violation of this section may be fined not more than $10,000. (4) The provisions of this section shall extend to the renewal or extension of existing contracts.
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