I move that the Committee agree with the Seanad in amendment No. 1:
In page 31, subsection (1) "of the Oireachtas" inserted after "Act" in line 51 and "an" in line 54 deleted and "such" substituted.
This is simply a drafting amendment.
Companies Bill, 1962—From the Seanad.
The Dáil went into Committee to consider amendments from the Seanad.
Question put and agreed to.
I move that the Committee agree with the Seanad in amendment No.2:
Before subsection (6) the following subsection inserted:
"(6) Subsections (4) and (5) shall not apply to a company which is principally engaged in the acquisition and underwriting of shares or other securities of companies carrying on a trade or industry in the State and which holds a certificate of exemption issued by the Minister from the requirements of those subsections."
This amendment was made, on my recommendation, by the Seanad Committee and adopted by the Seanad. During the course of the examination of the Bill by the Special Committee of the Dáil I introduced an amendment seeking to exclude the Industrial Credit Company from the obligation of including in its directors' report a reference to companies in which it has a holding of more than 20 per cent by way of equity capital investment. It was suggested to me that this obligation would deter industrialists in this country from seeking equity investment from the Industrial Credit Company. One of the purposes of the section as it stood was to ensure that a position in which take-over bids could be made would not be reached without the shareholders in a company having some knowledge of the position as affecting their own company in regard to shares held in it by another company.
The section as it was drafted inadvertently upset the operations of the Industrial Credit Company in the manner I have just suggested, and this obligation to indicate holdings by the Credit Company in Irish industrial concerns was regarded as unnecessary and undesirable in the circumstances. The manner in which the exclusion of the Credit Company is now achieved will make it possible for any other company whose principal business is the acquisition and underwriting of shares in an undertaking in this country to take advantage of this subsection provided that company holds a certificate of exemption from the Minister for Industry and Commerce. The subsection as it now stands will serve to exclude the Credit Company from this obligation because I propose to issue a certificate to it. It has been agreed unanimously by the Special Committee of the Seanad and adopted by the Seanad itself.
Can the Minister say if the Industrial Credit Company is the only company excluded in the manner set out in this amendment? While appreciating the reasons which the Minister has given, may I ask is there an obligation on the Industrial Credit Company to give details in its annual report of its investment in particular companies here? While it might be undesirable to furnish this information on request, at some stage the public interest might require that the actual extent of the Industrial Credit investment would be stated and made available.
I want to put on record, as I said at the Special Committee, that I entirely disapprove of this amendment. I have yet to find a single person who practises in company law, be he an accountant, a barrister or a solicitor in this city, who does not regard the amendment as being a most unpleasant precedent which they are afraid will have serious repercussions. Apart from that, it is entirely wrong that when public moneys are being disbursed by the Industrial Credit Company, we should not get information in this House in relation to their disbursement or that it should not be available to people going to make the appropriate inspections. It seems to me that the effect of this amendment will be that there will be a very much greater atmosphere of hugger-mugger in relation to Industrial Credit Company financing which in the long run will do a great deal of harm to genuine financing by that company.
I have had the view for some time —and the Minister knows I have had this view—that the Industrial Credit Company were wrong in mixing up normal financing with certain other financing they were asked to do by Government direction. Therefore, I welcomed the division of their previous responsibilities which was made in the Bill which was enacted some time ago. It was a step in the right direction. This is a step in the wrong direction and far from assisting the financing of industry will throw an air of suspicion over all financing which in the long run will defeat entirely the aim the Minister has and the aim that I believe the directors of the Industrial Credit Company also had in making these representations to the Minister.
I am aware of Deputy Sweetman's attitude to this and having argued with him objectively from both sides on the Special Committee, I do not propose to go into the arguments again. May I say in reply to Deputy Cosgrave that should a company doing the same type of work as the Credit Company are now doing emerge and apply for a certificate of exemption, I would consider an application from it.
Does the Minister mean a private company?
A genuine company.
A company privately owned?
Privately or publicly owned.
Then the Minister may as well scrap the whole section and the whole Companies Bill in that respect.
Is there no obligation on the Industrial Credit Company to furnish particulars in their annual report?
No.
No.
Can they cover up an advance of this nature?
Yes.
It is not a question of covering up. This is maintaining the status quo.
They need not disclose it. At present are they not obliged to disclose it in their annual report?
No, they are not.
Question put and agreed to.
I move that the Committee agree with the Seanad in amendment No. 3:
Before subsection (5) the following subsection inserted:
"(5) (a) A copy of every declaration made and notice given in pursuance of this section shall, within 3 days after the making or giving thereof, be entered in a book kept for this purpose. Such book shall be open for inspection without charge by any director, secretary, auditor or member of the company at the registered office of the company and shall be produced at every general meeting of the company, and at any meeting of the directors if any director so requests in sufficient time to enable the book to be available at the meeting.
(b) If a company fails to comply with this subsection the company and every officer of the company who is in default shall be liable to a fine not exceeding £100 and if any inspection or production required thereunder is refused, the court may by order compel an immediate inspection or production."
The object of the amendment is to ensure that the shareholders of the company will be informed as to the interests of each director of that company in contracts with other organisations. The obligation in the Bill as it left the Dáil was that the director should disclose his interest in such contracts to his fellow directors only. This extension has been inserted in the interests of the shareholders.
This is evidence of the fact that the Seanad examination was worthwhile, because this is an excellent amendment.
I gave due acknowledgment of that fact to the Seanad Special Committee.
Question put and agreed to.
Amendments reported and agreed to.
Ordered: That a message be sent to the Seanad accordingly.
Does the Minister still adhere to 1st April, 1964, as the operative date?
Yes. I am informed also that it would be possible to meet the Deputy's suggestion about having a certain number of copies bound in a more substantial way, for the use of practitioners.
Good. I presume the Bill will be white printed first without waiting for the delay of translation?
It is the first white printing I am referring to.
I am obliged to the Minister.