Dáil Éireann debate -
Tuesday, 22 Feb 1977

Vol. 297 No. 1

Bula Limited (Acquisition of Shares) Bill, 1977: Committee Stage (Resumed).

Question again proposed: "That section 2, as amended, stand part of the Bill."

Mr. O'Malley

This is the chief section. It would authorise the Minister to buy 24 per cent of the shares in Bula Limited for £9.54 million. It is necessary, when considering the commercial and general public propriety of the Minister's proposed purchase of these shares, to consider a number of relevant matters which pertain to the company in which he has chosen to buy this minority holding. If in discussing certain aspects of the commercial and legal operations of this company I have to appear critical of them, I apologise in advance. I have no wish to take on the company any more than I had over the last three or four weeks. The Minister has chosen to buy these shares and accordingly it is necessary for us, if we are to examine the proposed deal properly, to look into some of the public facts that are available in relation to the company.

I have had a copy made for me by reputable professional searchers in Dublin of the entire file relating to Bula Limited in the Companies Office. This information is available to every member of the public. The number of this company in the Companies Office is 33738. This search was made about a week or ten days ago. There was some difficulty making it because the file was not available every day, which is unusual. I assume on the day my searchers made the search that they were in a position to copy the entire file and that none of it was missing. On that assumption I make the following comments.

The Articles of Association of this company, which is now called Bula Limited but started out as Wright Limited, contain a most unusual article, unusual in the context of this Bill and of the agreement of the 12th December, 1975, to which the Bill refers. The unusual article, No. 11, is the last of the special drafted articles and is headed "Indemnity". With the Chair's indulgence I will read it because it might not be available to Members of the House who do not want the trouble of going to Dublin Castle to look at it. It reads as follows:

Every Director, Managing Director, Agent, Auditor, Secretary or other officer of the Company should be entitled to be indemnified out of the assets of the Company against all losses or liabilities which he may sustain or incur in or about the execution of the duties of his office or otherwise in relation thereto, including any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under Section 391 of the Act in which relief is granted to him by the court, and no director or other officer shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the execution of the duties of his office or in relation thereto. But this Article shall only have effect in so far as its provisions are not avoided by Section 200 of the Act.

During his reply to the Second Stage debate on 2nd February, 1977, the Minister stated that four people whom he named had guaranteed performance of the agreement of the 12th December, 1975. He named the four people —who appear to be the four directors of Bula Limited—Messrs. Roche Senior and Junior, Mr. Wymes and Mr. Wood. They are referred to in this Bill as "certain other parties named in the agreement"; they are not named. They are the four guarantors. Unfortunately we have not seen this agreement; it is a secret document. But the Minister told us when replying to the Second Stage debate that these four gentlemen have guaranteed performance of the agreement by Bula Limited.

Performance of the agreement in the context of what we are talking about now would appear to mean that they would take all steps legally open to them to try to get the company into production, the mine operating and producing profitably at as early a date as possible, and to do all or any other acts which are necessary or conducive to the attainment of the commercial objects of the company. Under that unseen agreement the Minister has certain rights as against the company. When I say "the Minister" I mean, in effect, the taxpayer because it is his £9.54 million that is being used.

If the Minister felt, for example, that planning permission applications were not being pressed ahead sufficiently or that some other steps were not being taken to get the company into profitable production as soon as was reasonably feasible in all the circumstances and started an action, as he would be entitled to do under this agreement, against the company and the guarantors, and if, specifically, he started against the guarantors to get them to honour their guarantee of performance of the terms of the agreement and, let us assume, he was successful and the court took the view that the Minister was entitled to enforce his guarantee of performance against the four guarantors who were also directors, he would find himself in the position—and I suggest that this is a rather anomalous position to be in— that the four guarantors concerned because they are also directors could pass on any claim the Minister might make in this respect to the company. They could seek total indemnification by the company in respect of any claim he might have under the secret agreement of December, 1975, against them.

Then the Minister would be in the position that, having successfully sought a declaration, that he was entitled to have certain things done, the company, in which he would then be a 49 per cent shareholder, would have to indemnify the guarantors and directors against the Minister's action; he would, in fact, be taking the action 49 per cent against himself. The guarantors and directors would be only nominal parties for the purpose of passing on judgment in the action which the Minister, in his capacity as Minister for Industry and Commerce, would be taking against Bula Limited, in which he would be a 49 per cent proprietor by virtue of the fact that presumably at that stage he would hold shares to that amount.

Even the most non-legal minded person would agree that any such situation is ridiculous. Has the Minister taken into account the virtual uselessness of this guarantee provision, which we have not seen, in the agreement, which we have not seen, of the 12th December, 1975? If he himself has to indemnify the defendants against whom he takes action as to 49 per cent he is penalising himself and the taxpayer. What is the point of such an operation? The Minister cannot say that this article II appeared after he signed the agreement; it did not. It was there in the original memorandum and articles of this company registered on 19th March, 1971. More than four-and-a-half years before the Minister signed the agreement he would have been aware of the existence of this indemnity. It is a very broad indemnity but I do not see anything illegal in it because it makes the necessary references to section 200 and section 391. Section 200 prevents certain types of indemnities being given but this does not extend to contractual indemnities of this kind. Section 391 is a section in relief of directors who may have acted negligently but who did not act in bad faith. Of course, that would not arise here because one is assuming that there would be no question of bad faith, it would be a question of inability to fulfil a guarantee, possibly through factors which are outside the direct control of the guarantors. This is a matter which I do not propose to develop any further at this point. But I should like to hear the Minister's views on this because it seems quite futile to have a guarantee when, in fact, the guarantors will be indemnified as to 49 per cent by the Minister.

I now want to deal with the company and what appears to be the evidence disclosed by its public file in the Companies' Registration Office. Although this company was registered on the 19th of March, 1971, it did not file any annual return until the 12th of November, 1974—which is more than three-and-a-half years after its formation and registration. Under the terms of section 125 presumably the company would not have had an obligation to file a return in respect of the calendar year 1971 because that was the year of its incorporation but it would have had a legal obligation to file annual returns for 1972 and 1973 and to file these within a reasonable period. In fact, we find that the two annual returns for 1972 and 1973 were filed together on the 12th November, 1974. It is possible that the 1973 return might have been in time or may not have been too late but quite clearly the return for 1972 was late, being filed nearly two years after the end of the year to which it referred.

Section 125 (2) of the Companies Act, 1963, states:

If a company fails to comply with this section, the company and every officer of the company who is in default shall be liable to a fine not exceeding £100.

Section 125 (3) states:

For the purposes of this section and of Part I of the Fifth Schedule, "director" and "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Section 125 (4) states:

Proceedings in relation to an offence under this section may be brought and prosecuted by the registrar of companies.

The registrar frequently prosecutes companies under this section. The numbers are given in the annual report and these companies are fined varying amounts.

It would appear that there was noncompliance in 1974. Assuming that the file is complete and that there was nothing missing when the search was conducted on my behalf, it would seem that the last annual return was filed on the 12th of November, 1974, because up to about a week ago no further annual return was filed. For that reason it appears that there could have been a failure to comply with the provisions of section 125 of the Companies Act, 1963. The two returns filed on the 12th of November, 1974, in respect of the years 1972 and 1973 both contain under section 4, which contains particulars of indebtedness, the return nil, that is, they state that there was no indebtedness on the part of the company on the 31st of December, 1972, and on the 31st December, 1973. The Minister tells me that they have filed subsequent annual returns but that they are not available on the file at the moment. If they had filed returns in respect of the years 1974, 1975 or 1976 presumably that entry could not still be nil. It would be necessary for the company to specify what its indebtedness was and this, of course, is a factor which is extremely relevant when it comes to the question of deciding whether it was wise for the taxpayer to have to pay £9.54 million for 24 per cent of the shares of the company. No doubt it was just an oversight that the returns appear not to have been made as required by section 125 of the Companies Act, 1963.

It is not uncommon for small companies who have not professional secretaries and advisers to overlook these things. After a year or two they get a reminder from the registrar of companies and they usually comply then. But this company is not a small company without access to professional advice.

The secretary of the company is a solicitor of standing and would not normally allow a company to be in default in a matter such as this and, in particular, would not allow any company to be in default where the question of complying with the law was concerned. The annual return does not appear to be the only document where there was failure to make return. One finds on the file also that a special resolution was passed by the company increasing this authorised capital from £100 to £1 million. That resolution was passed at an extraordinary meeting of the members of the company duly convened and held on the 16th July, 1974. Although section 143 of the Companies Act, 1963, requires, again under the sanction of a penalty following prosecution in the District Court for failure to comply, such a resolution to be filed within 15 days of its passing, the resolution was filed more than 18 months after it was passed, which, on the face of it, is not in accordance with section 143 of the Companies Act, 1963.

On this public file in the Companies Office there are a number of references to an agreement of the 17th February, 1975, between the company and somebody called Haras el Chorro, SA. The agreement between the company, who are described at various points in this file in connection with this as the mortgagors, and Haras el Chorro, SA, appears to relate to the minerals included in Folio 26646, County Meath. That appears to be borne out by a number of further references in the file where the charges are concerned. The mortgage of the 13th September, 1976, is in favour of the Northern Bank Finance Corporation Limited, registered on the 15th October. That mortgage covers, according to the particulars on the file, the lands comprised in Folio 26646 County Meath but excluding and excepting thereout the mines and minerals on and under the said lands.

It goes on later to refer separately to those mines and minerals as being all the estate, right, title and interest referred to in paragraph 1 of an agreement dated 17th February, 1975, made between Haras el Chorro, SA and the company and therein described as all the estate, right, title and interest of the vendors in and to any minerals on or under the lands comprised in Folio 26646 aforesaid upon and subject to the terms and conditions contained in the agreement together with the company's rights and benefits acquired under the said contracts.

We are entitled to ask the Minister a number of questions in connection with this. Who are Haras el Chorro, SA? What is in the agreement of the 17th February 1975? Why are the minerals lying under this particular folio excluded? Have they been mortgaged in favour of Haras el Chorro, SA? Were all these facts known to the Minister's advisers and made known to the arbitrators and so on? If there is a mortgage or some other encumbrance, what is the nature of it, the amount of it and the purpose of it? If one had that information it would prevent speculation as to what might have been the nature of whatever agreement has been made.

As the annual returns for 1974, 1975 and 1976 do not appear to be on the file in the Companies Registration Office this has avoided the necessity of stating the indebtedness of the company. As there appears to be an obligation under the law of the land to provide this information as to the up to date indebtedness of the company at the 31st December in each of the years, would the Minister now give us that information? I trust he will not now suggest that it would be commercially damaging to the company to give that information since the Companies Act, 1963, requires it to be given. My recollection is that section 125 is to a great extent a reprint of the corresponding section in the Companies Act, 1908 which to a great extent was a reprint of the corresponding section in the old Act in the 1860's.

One hopes there was not a deliberate intention of trying to conceal those figures in view of the fact that the provisions of the law require them to be given. One must become a little worried, because we have here a company of which the Minister is buying a 24 per cent interest by paying some of the individual shareholders £9½ million for some of their shares. Up to now the company would appear not to have complied with various provisions of the law relating to companies as contained in the Companies Act, 1963.

That Act is a publicly promulgated Act of the Oireachtas and what worries me is that if there is a failure to comply with a publicly promulgated law is there not at least a danger that such company might also, perhaps inadvertently, fail to comply with the provisions of the secret agreement of 12th December, 1975, which this Bill seeks to ratify and give force of law to? It seems that there is a danger that a company which inadvertently failed to comply with a publicly promulgated declared law might equally inadvertently fail to comply with the details contained in the secret agreement of 12th December, 1975, which will become law if this section is passed.

Minister for Industry and Commerce (Mr. Keating)

I will respond to what the Deputy has said as adequately as I am able to. I am not a lawyer and I am not a specialist in these things. I do not have the specialist knowledge that the Deputy, through his profession, possesses. If either my understanding of his points is inadequate or my exposition or use of words is wrong it arises from the non-specialist nature of the contribution I will be making. With regard to the point the Deputy made about article 11 in relation to indemnity, on Second Stage I said that the four people who had given a guarantee of the performance of the agreement gave that guarantee in their capacity as beneficiary owners of the shares and that guarantee does not relate to their position as directors of the trading company. As the Deputy is aware, having held the office of a Minister, in the functioning of a Department there is continuous legal advice of the highest quality available to a Minister. In circumstances such as this legal advice is continuously and extensively used. I understand that the new articles were vetted by legal advisers in my Department. If I understand the situation correctly the points made by Deputy O'Malley in relation to idemnity do not arise.

The Deputy made a second point about the discrepancy in time between the filing of an annual report for 1972 and 1973—he said they were filed together on 12th December, 1974. I do not possess expert knowledge in this area, and obviously anything I say would be subject to my lack of that knowledge. I do not know whether this is something that happens quite frequently or if they are prodded a bit by the Companies Office. I cannot comment on the significance or the weight of that delay. I cannot give him the details he asks for in the following section of his question but I can say that obviously the arrangements leading to the completion of the contract provided for detailed consideration of the financial affairs and all the other relevant facts of the company's affairs by people who understand them, not by me because no doubt they would tell me if it were relevant to do so. I am not a specialist. Those facts were investigated by people on our side who understand them. Arrangements leading to the completion provided for such disclosures as may be necessary to satisfy the Department and me as Minister about the various facts. I can assure everybody that from our side the matters are being scrutinised very carefully as is proper. I regret I cannot give the Deputy more precise answers than those but it is due to my lack of specialist knowledge.

Mr. O'Malley

The Minister will agree that the returns I have referred to were made late.

Mr. Keating

I have no knowledge on which I can dispute that fact.

Mr. O'Malley

The Minister will recall that I made inquiries about a company or organisation, Haras el Chorro, SA, which appears to have an agreement or mortgages of some kind on some of the minerals which Bula own. Can the Minister say who they are or what is the nature of the arrangement with Bula?

Mr. Keating

I cannot but I should like to repeat that, while I cannot give that information, it is available to my Department and is being carefully scrutinised.

Mr. O'Malley

To whom?

Mr. Keating

The legal people on my side who are concerned with the completion of the contract.

Mr. O'Malley

Is the Minister not aware of it himself?

Mr. Keating

I am not aware of it. I am not familiar with the details referred to.

Mr. O'Malley

I can make a file on this available to the Minister if he wishes to have it.

Mr. Keating

It is available to my Department.

Mr. O'Malley

Does the Minister agree that Haras el Chorro, SA, may be a shady multi-national company or, indeed, for all one knows, be the offshore operation of some very rich man or men. When I say "offshore" I mean offshore in the investment sense. Horrible possibilities spring to mind and it is not reassuring that the Minister cannot tell us anything about this organisation which appears fairly prominently on the Bula Limited file. With the greatest respect, the Minister has a duty to be familiar with the arrangements made by this company. This agreement with Haras el Chorro, SA, was made on 17th February, 1975, and I can only hope to God, for the sake of the taxpayers, that the Minister knew all about that agreement when he signed the agreement on 12th December, 1975.

Mr. Keating

I can only repeat that I cannot accept the interpretation of a Minister's duty, that I have a personal duty to be familiar with the arrangements. My staff certainly have, my Department have, my legal and financial advisers have, but in the way in which Departments work and in the roles which Ministers play in Departments in our structure of Government, it would never be the norm or the practice for every Minister to try to carry such details.

Mr. O'Malley

I accept the Minister is not obliged in his personal capacity to know all these things that I have been asking about but I suggest that his legal, financial, departmental advisers are not answerable to this House but that the Minister in his Ministerial capacity is answerable, and if he has not personally got the information that is clearly necessary—we are now talking about an apparently flagrant breach of the law—for the information of the House, his advisers should give it to him. I am sure we would recess for a reasonable period to enable this information to be obtained from the sources who have it.

Mr. Keating

I have stated that the information is being properly considered and that it has been at all stages by the experts, but the suggestion that I should carry or try to understand all that information is obviously out of keeping with all our traditional practices and all of the norms of how the Government operate. Although it is true that I bear the responsibility, I must have confidence in the very competent legal and financial experts who have time to study these matters.

Mr. Colley

I am mystified as to why the Minister should misrepresent what Deputy O'Malley has said. Anybody listening to Deputy O'Malley could not fail to understand him. He was not saying that the Minister in his personal capacity should have detailed knowledge of all these points. What Deputy O'Malley went on to say, and this is the kernel of the matter, is that the information sought should be available to the Minister from his advisers so that the Minister could give it to the House. The Minister spoke about norms sought by various Departments. The procedure described by Deputy O'Malley is the norm. There are rare occasions—I am glad to say they are rare—when information sought in the House is not available to the Minister from his advisers and on such occasions the Minister has to make some special arrangement whereby he will get that information for the House and present it at a time appropriate to enable the House to consider it. I do not know if the Minister has grasped the points made by Deputy O'Malley. The Minister has not controverted Deputy O'Malley's points that a number of the annual returns of this company which are required by law to be filed have not been filed. In the absence of being field, and leaving aside the requirements of the Companies Acts, there is not available to Deputy O'Malley or anybody else who wants it the information which by law should be there.

Deputy O'Malley comes to the House and asks the Minister, because that information has not been filed as it should have been according to law, to get that information, and the Minister has his advisers available. It is not reasonable for the Minister to say that he personally cannot know that. That is not what Deputy O'Malley said. In this particular matter a very large sum of the taxpayers' money is being invested and there is need for the kind of information that would be available according to law to the public generally in regard to any company—not just one in respect of which the State is paying a great deal of money to some of the shareholders. Such information is available in respect of any company but in this case, since it is not available, I suggest very seriously to the Minister to consider Deputy O'Malley's suggestion that if the Minister is unable to produce the information which should be available according to law, he is not being fair to himself if he comes in and in effect says that the information which by law is not there will still be kept secret.

The Minister has said he has not got available to him the information which should have been filed. Then, at the very least it ought to be sought immediately so that the House will be enabled to consider the very relevant matters brought up by Deputy O'Malley in regard to the indebtedness of the company. This is something the company should have disclosed in a file. There are possibly very good reasons why that was not done. Inadvertence could be one of them. There is no suggestion of wilful concealment. Because the information is not available, in the circumstances there is a clear onus on the Minister, when he is asking the House to approve the payment of £9½ million of taxpayers' money to those shareholders, to produce in the House the information that should be available.

Mr. Keating

There are some of the questions to which I can give answers, and then we can discuss what we should do. I am informed that the agreement covers the purchase by Bula Limited of the surface land necessary for development of the mine and that it was part of the matters known to and taken into consideration by the arbitrators.

Mr. Colley

Which agreement is the Minister referring to?

Mr. Keating

The agreement between the company as mortgagors and Haras el Chorro, S.A. I do not possess more details than that. I see the force of the observations of Deputy Colley but I am not in a position to know with certainty the amount of time that will be required and the amount of detail. I am in the hands of the House in this respect. I am not trying to be difficult about it but I cannot give the details now.

Mr. Colley

I am talking off the top of my head and I do not know what Deputy O'Malley will think of this, but would the Minister consider, assuming he will not be able to get the information today, that we might consider something on the lines of recommitting this section on the next Stage?

Mr. Keating

My difficulty is that I am not an expert on procedure. It is obvious we could be in the House for a very long time and I would wish to be finished with the Bill without delay. If there is some mechanism by which we could go on to the other sections and come back to this section later I will see what can be got in the meantime. I am in the hands of the Chair.

Mr. O'Malley

If that is permissible I am prepared to agree to the Minister's suggestion. Since we have not all this information and since the Minister will get the information for us perhaps we could skip section 2 and go on to section 3. I remember suggesting that on another occasion and I have a recollection I was told it could not be done.

An Leas-Cheann Comhairle

The House, by agreement, can decide to skip the section and go on to later sections, or the section could be recommitted on Report Stage.

Mr. O'Malley

Let us skip the section and come back to it tomorrow.

An Leas-Cheann Comhairle

That means that further consideration of the section is postponed until tomorrow.

Mr. Colley

There was one other question in regard to what the Minister said in relation to Article 11 of the Articles of Association. Is the Minister saying—I want to be quite certain about this—that the secret agreement of 12th December, 1975, provides specifically that the guarantee of its performance given by the four directors is given in their capacty as beneficial owners of shares and not in their capacity as directors and, therefore, Article 11 does not apply? Is the Minister specifically saying that is what the agreement provides and, as a consequence, Article 11 does not apply?

Mr. Keating

Yes. I believe that to be what I am conveying to the House as articulated by the Deputy.

Mr. Esmonde

That is normal procedure on the purchase of shares in a private company. You have to bring everybody in to make quite certain you get on the register yourself.

Mr. O'Malley

The Minister is in the difficulty that, while that may have been the intention and the four gentlemen concerned may have signed this secret agreement of 12th December, 1975, qua shareholders, nonetheless they are directors and, irrespective of what may have been the intention on 12th December, 1975, because they are directors—generally speaking, one is a director only if one is also a shareholder, though not necessarily so—they have in law the benefit of the indemnity that Article 11 gives.

If in law they have the benefit of that indemnity then the Minister is in effect suing himself as to 49 per cent any time he seeks to exercise the guarantee. For that reason it is to my mind unsatisfactory, to say the least. A guarantee that is worth precisely only 51 per cent of what it purports to be worth is unsatisfactory and the proper course to have followed in such an instance before the signing of the agreement of 12th December, 1975, would have been to have passed a special resolution rescinding Article 12, repealing it, getting rid of it from Article 11 or, alternatively, adding something to the effect that for the purposes of the agreement of 12th December, 1975, made between Bula Holdings, Patrick Wright and certain other holdings and the Minister, Article 11 shall not apply. That could have been included by a resolution to that effect even though it was not the intention apparently to give them an out and they signed, as the Minister says, in their capacity as shareholders rather than as directors. Nevertheless, the fact they are directors, and while they remain directors, gives them the right to claim this indemnity and they will be claiming that indemnity as to 49 per cent from the Minister himself.

Mr. Esmonde

I do not want to appear didactic in a long legal disputation with a lawyer on the other side but I want to remind the House that we are talking about a guarantee. Now guarantees are notorious in the sense that they are very strictly construed by our courts, whatever about the courts in other countries, and one is tied to the letter of the guarantee and, if one does not strictly comply with the guarantee, then it is not a guarantee. I take the Minister as saying that the four signatories, the guarantors, signed as beneficial owners. That means they signed in their personal capacities and they would be construed as personally responsible. That is the way it would be interpreted in a court of law. I do not go along with the view expressed by Deputy O'Malley that eventually the Minister is coming back on himself or the public back on themselves as being responsible. This is a personal responsibility by the four signatories to the agreement.

Mr. O'Malley

Who have an indemnity.

Mr. Esmonde

They are guarantors.

Mr. Colley

I presume the Deputy would not disapprove if the Minister were to seek to have a special resolution passed on the lines suggested by Deputy O'Malley specifically excluding this agreement from Article 11.

Mr. Esmonde

The Minister's legal advisers considered the effect of the guarantee. I cannot put myself in the shoes of the Minister's legal advisers and neither can the Minister.

Mr. Colley

And neither can we when we have not seen the agreement.

Mr. Esmonde

I have not seen the agreement but I am taking the Minister's word. There were four guarantors and they guaranteed in their personal capacity, not in an official director capacity or officer capacity. They personally committed themselves.

Mr. Colley

I would ask the Minister to look at it.

Mr. Keating

The fact that it is on the record means it will be looked at.

Mr. O'Malley

It would be wrong for the House or the public to get the impression this is all lawyers' talk. These are basic, fundamental things about the company, things which are disturbing. These are basic, fundamental inquiries to which there has not been a response. Happily, as a result of the arrangement, for which we are all grateful, on the conclusion of the remaining sections we will return to this section and there will then be a response.

An Leas-Cheann Comhairle

There being no objection, further consideration of section 2, as amended, is postponed.

SECTION 3.

An Leas-Cheann Comhairle

Amendments Nos. 8, 9 and 10 are related to amendment No. 7 and may be discussed together.

Mr. O'Malley

They all deal with the same point. I move amendment No. 7:

In page 2, lines 29 and 30, after "section," to delete "a Minister of State" and substitute "the Minister".

Section 3 (1) says that: "Subject to subsection (2) of this section, a Minister of State may exercise, in respect of shares of the Company ..." This is not a fundamental matter in the same sense as earlier amendments were fundamental. This is less fundamental and less important but there appears to be a certain amount of confusion in the references to "the Minister", "a Minister" and "the Minister for Finance". In Section 1 "the Minister" is defined as the Minister for Industry and Commerce; in section 2 the Minister for Finance is described as being the Minister in whose name the shares will be registered and in section 3 there is reference to "a Minister of State". That could be the Minister for Defence or the Minister for Fisheries, just to take some Ministers at random. The question then arises how do these Ministers come into this.

The Minister for Industry and Commerce exercises the powers, the Minister for Finance holds the shares and "a Minister" has certain other functions. The powers were clearly intended to be exercised by the Minister for Industry and Commerce. If the words "a Minister of State" were deleted and if the words "the Minister", meaning the Minister for Industry and Commerce, were substituted we would get over a lot of the confusion and difficulty. Will the Minister agree to that?

Mr. Keating

I cannot agree to it for a reason which I hope the Deputy will find satisfactory. The confusion appears to be more seeming than real and, perhaps, I should explain the background which apparently gave rise to the amendments. While the agreement provides that the Minister for Industry and Commerce in the first instance will acquire the shares, it is the generally accepted practice that any shares purchased out of public funds should be registered in the name of the Minister for Finance. Therefore, it was necessary for the parliamentary draftsman to insert provisions about holding shares and exercising powers to cover the interim period when they would be transferred to the Minister for Industry and Commerce and the subsequent period when they would be held by the Minister for Finance. It is envisaged that the term of time between the acquisition by the Minister for Finance will be short but presumably it was necessary that the legislation should envisage at least the possibility of there being a delay in transit through the Minister for Industry and Commerce to the Minister for Finance.

In regard to other Ministers, of course it refers only to a Minister holding shares, not to any Minister in general. Therefore, it refers to the Minister for Industry and Commerce through whom they pass and to the Minister for Finance in whom they come to reside. Perhaps if the Deputy sees the drafting in that light and understands it, he will not wish to press the four amendments which are related and which come from this single point.

Mr. Colley

Perhaps the Minister will tell the House why this form of procedure has been accepted whereby the Minister for Industry and Commerce acquires the shares for a very short time and then passes them to the Minister for Finance. If they are going to end up with the Minister for Finance, why not have them acquired by that Minister and have the various powers exercised by the Minister for Industry and Commerce? Would not that simplify matters?

Mr. Keating

The agreement provides that in the first instance the Minister for Industry and Commerce will acquire the shares. The normal practice is that ultimately they reside with the Minister for Finance. There is a transit mechanism. I suppose it could have been done in another way but it was not. I do not think there is a major point here.

There are powers and rights attaching to shares which will be exercised by the Minister for Industry and Commerce even though they are held by the Minister for Finance. The Deputy knows this is quite a normal practice. Every Minister exercises rights in regard to shares that are not registered in his name but which are registered in the name of the Minister for Finance. There is something of a division here. In this country we do not operate the practice where if some matter refers to, say, the Department of Transport and Power the shares are registered in the name of the Minister for Transport and Power. He exercises the rights and powers but the Minister for Finance holds the shares. There is that dichotomy built into our system and we are not trying to change it.

Mr. Colley

It appears to me that the Minister is introducing a new element in the normal procedure which he has described, whereby shares are held by the Minister for Finance and the powers in respect of such shares exercised by the Minister for Industry and Commerce. When the Minister was explaining the drafting, I thought he was referring to the interim period during which the shares would be vested in the Minister for Industry and Commerce and before they would be vested in the Minister for Finance and when the powers would be exercised by the Minister for Industry and Commerce. Perhaps I misunderstood the Minister.

Mr. Keating

Certain responsibilities and powers will be continuously exercised by the Minister for Industry and Commerce, as the Minister responsible in that area. Therefore, the exercise of certain powers will be continued by the Minister for Industry and Commerce, as is the normal practice.

Mr. Colley

Therefore, the interim period is not relevant?

Mr. Keating

The interim period is a mechanism to get them from the present owners into the hands of the Minister for Finance and it has no relevance. It is simply a drafting mechanism. That was how the parliamentary draftsman thought was the way to encompass the end result.

Mr. Lalor

I have listened to the Minister's explanation but I do not understand how the parliamentary draftsman succeeded in getting us worked into such a cocked hat in this section. One of the amendments put down by Deputy O'Malley proposes to insert the words "the Minister" meaning the Minister for Industry and Commerce instead of "a Minister". We are taking it for granted that the parliamentary draftsman was referring to the Minister for Industry and Commerce in the reference to "a Minister".

Mr. Keating

It was intended to encompass either the Minister for Industry and Commerce or the Minister for Finance but not any other Minister because he would not hold shares.

Mr. Lalor

This is where the vagueness comes in. Section 3 (1) refers to a Minister of State and states he may exercise powers in respect of shares held by him. The word "him" in this context may refer to two people; it may be the Minister for Industry and Commerce or the Minister for Finance. From what the Minister has said it appears that shares in the company will be in the hands of the Minister for Finance. However, there is a certain confusion because the word "him" in section 3 (1) could refer at one time to the Minister for Industry and Commerce and at another time to the Minister for Finance. It is an extraordinary cocked hat situation into which the parliamentary draftsman, with due respect to his ingenuity, has placed us.

Taking the four amendments together, which is logical, I find it difficult to visualise the transfer of shares between whichever of the two Ministers might be holding the shares at any time. In that context, I wonder how the Minister visualises the exercising of that operation on his behalf by an attorney when it is not known which of the two Ministers holds the shares at any time. We have the same situation in regard to amendments Nos. 9 and 10 in section 4. Again, there is this element of risk, or are we visualising a type of situation whereby shares will be transferred? We are proposing the possibility of transferring shares to some other nominee. I cannot understand the ambiguity in those two sections. I agree with the Minister when he says that "a Minister" could only be the Minister for Industry and Commerce or the Minister for Finance. On the other hand, one consideration is the possibility of a change in the Department of Industry and Commerce in that there would be a further ministerial appointment and that the Minister was building some form of protection into the section. I realise there is ambiguity in what I am saying. The Minister normally makes clear statements but his outline of the reasons for not accepting the amendment was ambiguous.

Mr. Keating

I did not mean to sound ambiguous. While I am not a lawyer, I believe there is no ambiguity in the section. I assure the House that the only objective in this formulation is to ensure that the shares are transferred to the Minister for Industry and Commerce and then, as quickly as possible, transferred by him to the Minister for Finance. If there is more ambiguity than that, it resides in the system that we operate, whereby shares are held by the Minister for Finance but different Ministers exercise powers in relation to those shares even though they do not hold them. It is a reasonable practice and we have no wish to change it. In view of the indication as to why we find it necessary to proceed in that way, I wonder would Deputy O'Malley not press those four amendments?

Mr. Crinion

Is there any danger that we would have to pay for the transfer of the shares? For instance, the transfer of shares from a father to a son would involve stamp duty and other costs. Can the State transfer shares from one Minister to another without paying the normal fees?

Mr. Keating

I am informed that there would be no charge because it would be an internal book-keeping transaction. If fees were payable, the Minister for Finance would transfer moneys to the Minister for Industry and Commerce and vice versa. There would not be a net charge between one Minister and another.

Mr. O'Malley

The Minister is wrong; 50p is the amount of the stamp duty involved.

Mr. Keating

It goes back to the State.

Mr. O'Malley

The registrar of Bula Limited would be in breach of the law if he registered a transfer between two Ministers without an adjudication stamp. Since we now know that the two Ministers to be involved are the Minister for Industry and Commerce and Finance, would the Minister agree to an amendment of my amendment by deleting the words "a Minister of State" and substitutng "the Minister or the Minister for Finance"?

Mr. Keating

There is no objection to that amendment.

Mr. O'Malley

And the corresponding ones in Nos. 8, 9 and 10.

Mr. Keating

Our efforts may compound the ambiguities to which Deputies have referred.

Mr. O'Malley

No, they will not. The Minister can take my word for it.

Mr. Esmonde

Is that a personal guarantee?

Mr. O'Malley

I have no indemnity.

Mr. Keating

Are we to insert "the Minister for Industry and Commerce or the Minister for Finance" instead of "a Minister of State"?

Mr. O'Malley

The amendment is "the Minister or the Minister for Finance." No. 7 is changed to read "the Minister or the Minister for Finance"; No. 8 is withdrawn and No. 9 would then read "the Minister or the Minister for Finance" and No. 10 should then become "such Minister".

Mr. Keating

All right.

An Leas-Cheann Comhairle

What Deputy O'Malley wants in No. 10 is to substitute "such Minister" for "the Minister".

Amendment No. 7 amended, by leave, by the addition of "or the Minister for Finance" after "the Minister".

Amendment No. 7, as amended, agreed to.

Amendment No. 8, by leave, withdrawn.

Question proposed: "That section 3, as amended, stand part of the Bill."

Mr. O'Malley

Subsection (2) of this section contains the phrase "a right or power referred to in subsection (1) ... or referred to in the Agreement as being vested in the Minister”. It is very hard to pass into law some provision about the exercise of powers and rights that are given to a Minister or to anybody else by being referred to in an agreement if one has not seen the agreement. The powers may well be perfectly proper and legitimate powers, or they may not. The particular concern I have in relation to the Minister's powers in this matter is that his powers appear from what we have discovered about the agreement, not to be the ordinary powers that somebody buying shares in a company in the ordinary way would have. They seem to be less than the ordinary level of powers that the shareholder would have. The shares do not all have equal voting rights. They may be unequal in relation to other rights as well. They may not, for some reason or another, rank pari passu in regard to dividends. However, we do know they are unequal in regard to voting rights.

What is particularly disturbing is that the less than equal shares, the shares with the smaller or diminished rights, are the taxpayer's shares, not the shares of the four gentlemen and Reps. Wright deceased. The public's shares are the unequal ones, the ones with less rights than everybody else's. So much less are they that even if the State block of 49 per cent could pick up, as a result of discussion or this agreement or something else, the support of the 10 per cent Wright block, that 59 per cent block, which is predominantly the public block, would still be outvoted by the 41 per cent block. I refer to this because this is one of the rights or powers referred to in the agreement as being vested in the Minister. I just happen to know that non-equality of shares is one of the provisions of the agreement. How many more are there, for all we know, which are as bad as that? I hope there is nothing worse than that, but it is quite conceivable that there are provisions as bad as that. Even if they were only half as onerous from the State's point of view they would be very undesirable.

Why are we not let know about such things? Why can we not be given the agreement so that we may see what the Minister's rights are in the agreement? While this section is not one of any consequence so far as the root of the matter is concerned, it does, like virtually every other section of the Bill, contain reference to the rights or powers referred to in the agreement as being vested in the Minister. Can the public or I or anybody else be blamed for becoming increasingly suspicious? We do know of one very onerous provision in it. There may be others. One suspects that there are. Should the Minister not be seriously concerned that he has got himself into a situation where he is in a permanent minority? Even if he got a majority of the shareholders to come with him, he would still be outvoted all along the line until perhaps this mine was an empty hole in the ground or up to the stage that it never went into production at all.

It seems to me extraordinary that, first of all, the State should have accepted a minority situation in a private company when a minority situation in a private company is worth very little. If that is extraordinary, it is incredible altogether that, having got into a minority situation, further to copperfasten the permanence and powerlessness of this minority situation the State is now agreeing to special powers and provisions in this agreement whereby even if it were by chance or purchase or otherwise to acquire a majority shareholding it would still in fact be a minority so far as the exercise of any powers is concerned. I understand the only means under the agreement whereby the State could get an effective majority would be if the Roche-Wymes-Wood bloc broke up and the effective control of that shifted from those men or from their families or nominees. It is only in that unlikely eventuality that the State would be entitled to purchase at least 2 per cent of the shares which would give it a 51 per cent holding. That 51 per cent would then take precedence over the 39 per cent or whatever would be left in the Roche-Wymes-Wood bloc. The object presumably of that was to ensure that the four vendors, notwithstanding getting, with Reps. Wright, the £9,500,000, would still retain permanent control, even though the Minister has more shares than they have, and significantly more; he has 49 per cent and they have 41 per cent.

This House should not pass this section—even though it is an innocuous section in itself—while it contains that phrase "a right or power ... referred to in the Agreement as being vested in the Minister", until we know what the rights or powers referred to in the agreement as being vested in the Minister are. We should know everything that is in that agreement. Every day that passes makes it only clearer to the public at large that there is something fishy about all this if we cannot see the agreement signed in these circumstances, where clearly there is no question of commercial damage being done or of where commercial considerations apply. As I pointed out in the debate on the last section, Bula Limited appear to be, unhappily, a particularly sensitive sort of company. Before we reached this question of the terms of the agreement at all we saw that, through what was undoubtedly an inadvertence on their part, they had failed during a period of several years to file the annual returns that the general law of the land required them and each of the other 58,000 or so companies to file each year. The vast majority of companies comply with the law in this respect.

Curiously, however, Bula failed to make the returns. This only adds to the aura of secretiveness that has grown in relation to the company in recent times. Perhaps in this regard Bula are being less than fair to themselves. But because we have this situation, in which apparently the law has not been complied with in several respects in so far as the giving of information is concerned, there is the increased danger of their not complying with some of the provisions in this secret agreement.

In speaking of Bula not complying with the law I am not thinking in terms of some kind of vague civil obligation or right as between one citizen or group of citizens and another. I am not thinking of, for instance, a breach of contract where one person who might be damaged would have some right to damages. What we are talking of is essentially a matter pertaining to the criminal law. There are hundreds of prosecutions brought every year in the District Court by the registrar of companies. Some of these companies who do not comply with the law are fined fairly hefty sums, the maximum, I think, being £100 in respect of the company and £100 in respect of each officer involved in the default. But because of this background of secretiveness it is essential on this section, as on most of the others, where there are references to the powers, rights and duties that exist under the agreement, that we should know what these are.

Mr. Colley

There are a couple of questions arising out of this section which I should like to put to the Minister. These refer to the rights and powers of the holder of shares in this company. First, can the Minister say whether, on the assumption that the State holds 49 per cent of the shares, the State would get 49 per cent of any dividend?

Mr. Keating

The answer is yes.

Mr. Colley

Secondly, what can the Minister do in the event of his not being satisfied that the company are proceeding satisfactorily with the development of the mine? What powers has he got in such circumstances?

Mr. Keating

We are resuming a trend of the debate which we have been through a number of times and which I shall not pursue now at any great length. However, in regard to the Deputy's question, the powers I have are the normal powers legally inherent in the situation where the State or a private citizen or any other is an investor.

Mr. Colley

May I take it from that that the agreement referred to in this section does not contain provisions which would give the Minister any special power? I say this because the Minister has said that in the circumstances I outlined he would have the normal powers of an investor. I am not trying to trap the Minister but am merely endeavouring to find out exactly what he has in mind.

Mr. Keating

I have said previously that it is not my intention to go into the agreement in answer to piece-meal questions. That may be a situation which the Deputy does not like but it is the position I have taken.

Mr. Colley

I understand that. But the Minister has just said that in circumstances in which he would be dissatisfied with the development of the mine the powers he would have would be the normal powers of an investor of that amount of money and in relation to the number of shares involved. I trust I am not misrepresenting him but that is what I understood from his answer. If this is so it would seem to follow that he has no special powers in the agreement referred to in the section, powers that would enable him to take action if he were dissatisfied with the development of the mine. The question arises, then, as to how the Minister can reconcile the normal powers he would have as a holder of 49 per cent of the shares with the statement he made previously to the effect that as a result of this deal he can control the development of the mine.

Mr. Keating

We are coming round again to the matter of the agreement but I can refer to what was said during the Second Reading in regard to the question of the destination of the ore, of the rate of exploitation and of the diversion of the Blackwater—three crucial matters—in respect of which special arrangements have been made. This is knowledge that the Deputy possesses.

Mr. Colley

I am afraid I do not find that reply very satisfactory but I have no intention of going on about it. I merely wish to endeavour to establish as much information as possible. If the information being given by the Minister is inadequate or unsatisfactory, he in due course will have to accept responsibility for that. I have given him the opportunity of giving the information, but if he chooses to withhold it he must take the consequences.

There is another matter about which I should like to ask him. It is in relation to subsection (2) of section 3 and refers to "any matter which affects a function or responsibility of the Minister for Finance". I wonder in this context if the Minister could give us one or two examples of what might be covered by that phrase. I am thinking in terms of the powers being exercised in relation to the shareholding. What kind of powers in this regard would the Minister envisage would constitute a function or responsibility of the Minister for Finance?

Mr. Keating

I understand that this is a general provision which was proposed by the Department of Finance. I cannot be more specific than that.

Mr. Colley

The Minister is saying that he is not responsible for this section or for this part of the section?

Mr. Keating

I am not responsible for drafting the Bill.

Mr. Colley

There are difficulties in drafting a Bill. The draftsman's job is very specific and none of us would be as competent as the draftsman in this area. That does not mean that we should abdicate our function entirely and pass sections saying that we do not really know what they mean, that the draftsman put it in or the Department of Finance wanted it. I am concerned by the Minister's reaction to this question. It is not very reassuring.

Mr. Lalor

The Minister when questioned by Deputy Colley on specific points arising out of the agreement smiles and indicates that it is not his intention to fall for a line of questioning that will extract more information from him on this agreement. The information given to date is the minimum. We have cleared up all aspects related to this section with the exception of the agreement. The Minister will not reply to any provocative questions relating to it. Since we dealt with this agreement on section 1 and reached it here in section 3 we have had contributions from Deputy O'Malley and from Deputy Colley in which questions relating to the agreement have been left hanging in the balance. Because of this protection of the power referred to in the agreement, it is difficult for us to accept section 3.

Since we finished our debate on the agreement in section 1 the information was conveyed to the House by Deputy O'Malley that Bula, as a company, have not fulfilled their obligations under the Companies Act, 1963, in regard to the submission of reports. The Minister is not yet in a position to confirm that. We have a situation here where we are dealing with an agreement between the Minister and a company that may be in breach of a State Act. We have had a trend in this debate over the last two weeks whereby the Minister is more than honest in conveying that the volume of time he can spend within his own Department dealing with facts and factual replies to queries can be limited and that he is not a walking encyclopaedia, despite the impression given three years ago that he was close to it. We are coming to the stage where the Minister is conveying to us that, if this whole arrangement blows sky high and if the agreement does not measure up to his expectations, there will be a stack of escape clauses in the Minister's favour, so that all the blame will rest on the officials and expert advisers who contributed to the drawing up of this agreement and to the preparation of the file from which the Minister extracts his answers.

Down through the years it has been recognised that the buck always stopped at the Minister's desk. The attitude taken by the Minister in relation to this Bill is working extremely hard at passing the buck, for fear that his expectations do not meet the hoped for fruition. When Deputy O'Malley was going out of his way last week to point out that any blame in this regard should be attached to the Minister, the Minister said that we were being extremely hard and unfair to the people concerned in Bula, the individuals who cannot be here to defend themselves. The Minister said that they had committed no crime, as if the impression was being created by the Opposition that a crime had been committed.

An Ceann Comhairle

I hesitate to interrupt the Deputy. I have given wide latitude, but it is very obvious that the Deputy is ranging very wide of section 3, as amended.

Mr. Lalor

In section 3 we are talking about the agreement. The Ceann Comhairle has had the disadvantage of not being present when we had to skip over section 2, of not having heard the reasons for skipping over section 2.

An Ceann Comhairle

I am aware of what transpired.

Mr. Lalor

One of the reasons for skipping over it was that Bula, who are 50 per cent responsible for this agreement, have not complied with the regulations under the Companies Act, and the responsibility for seeing that those regulations are complied with lies with the Minister for Industry and Commerce. The Minister mentioned the other day that they had committed no crime, and this is what I am referring to. The situation is that, if the company as such have not complied with the regulations under the Companies Act, then they are in breach of the regulations. It is difficult to understand why the Minister who, as Deputy O'Malley has pointed out, has been the Minister who deals with prosecutions taken against companies who have not complied with those regulations——

Mr. Esmonde

It is the registrar of companies who deals with them, not the Minister.

Mr. Lalor

The registrar of companies is under the aegis of the Minister and I will plead, like the Minister, that I am not a legal expert.

Mr. Esmonde

I am just taking up the Act. I was trying to help the Deputy.

Mr. Lalor

I am grateful to the Deputy because I was Minister for Industry and Commerce and the registrar of companies comes under the ambit of the Minister for Industry and Commerce.

Mr. Esmonde

And he makes the decisions.

Mr. Lalor

Yes, and we can assume that the officials of the Department of Industry and Commerce, the legal experts and the various other people upon whom the Minister is relying, should have been and were in contact with the registrar of companies and must be aware of the facts.

Mr. Esmonde

No, the function of prosecuting is given to the registrar of companies in his own right. It has nothing to do with the Department.

Mr. Lalor

And he is under the Minister for Finance?

Mr. Esmonde

No, he is an officer in his own right.

An Ceann Comhairle

Let us have order.

Mr. Lalor

The money provided under the Estimates for Industry and Commerce is the money that contributes to the running of that registrar's office. The Ceann Comhairle draws my attention to the fact that there is a certain amount of repetition in relation to this matter but it arises from, again, the reference to the agreement. The stage has now been reached when the Minister should be more open than he was when dealing on the First Stage of this Bill with the contents of that agreement. One of the things that worries me in this regard is that the Minister has been acting so smugly in relation to his 49 per cent. I would like to ask him if under the agreement there is a situation where he can eventually see his way to being able to move into a majority shareholding position. I suppose he is not willing to reply to that.

Mr. O'Malley

I have no objection to the section as such but it does seem a pity that there is this reference to these powers, duties, rights and all the rest of it in the agreement and we are still not given any information in relation to them. Does the Minister realise the harm he is doing to the whole operation he is trying to put through by this constant silence and refusal to give information? This appears now to extend not just to the secret provisions of this agreement but even to the necessity to comply with the ordinary law. We posed questions that the Minister does not know the answer to. It is a situation that has few, if any, parallels in the history of this House. We had to take the unusual step of adjourning an entire section until the rest of the Committee Stage was over to try to get information. One wonders if the refusal to give information is due to this alleged necessity for confidentiality or to some other reason such as lack of knowledge. One is entitled to ask whether it is due to an anxiety not to disclose certain matters which the Minister knows would cause the House and the public at large to be even more critical of this behind-the-scenes deal than they already are.

I have no wish to oppose the section because the section as such, apart from this one reference in it, is innocuous. There is no matter of principle involved. At the same time one is not at all happy at the continued refusal of the Minister to give information, not secret, confidential, commercial information as he was trying to allege at the start, but information which the law of this land compels every citizen to provide within 15 days and which now, three years later, has not been provided. It is only when it was pointed out to him that the law obliges it to be given that he agreed to put back the section to the end so that he could try to get the information in his Department.

The Chair will recall Deputy Colley, Deputy Lalor, Deputy Barrett and myself seeking information of this kind on section 1 and on a number of the amendments in section 2 and being told it was secret and confidential. One of the things we wanted was the capital structure of the company, how they stood, what they had, and what they owed. We were told it was very unfair to pick out this little company and not make the same inquiries in relation to thousands of other companies in the country. There are about 58,000 companies registered in this country and the great majority of them comply with the law. Some of them do not. The taxpayer has been unfortunate that the Minister has chosen to do his deal with the directors and shareholders of one of the companies who do not comply with the law and whose failure to comply with the law has resulted in information not being forthcoming which not only this House was entitled to. It is information which every citizen is entitled to even if there were no Bula Limited (Acquisition of Shares) Bill, 1977. I or any citizen of the country would be entitled to go to the Companies Office in Dublin Castle and get this information on the payment of 5p or 10p, that is assuming that the information was there. It is not there.

The Minister's earlier claims of commercial confidentiality have now been truly and vividly shown up for what they are. I have always suspected that they were what they are, but now it is proved beyond doubt. It makes one think how valid was the Minister's refusal to give information in other instances. What he refused here to give was something which according to the ordinary law of the land must be given, and he refused because it would be commercially confidential.

It is unsatisfactory, therefore, that we should be in this position now and that this bogus secrecy should continue. What is the reason for it? We are entitled to ask that. The whole country is asking and is entitled to an answer and if that answer is not forthcoming I venture to think a lot of the country will give an answer at an early opportunity.

Question put and declared carried.

SECTION 4.

Mr. O'Malley

I move amendment No. 9.

In page 3, subsection (1), line 1, to delete "A Minister of State" and substitute "The Minister".

Amendment No. 9 amended, by leave, by the addition of the words "or the Minister for Finance" after "The Minister".

An Ceann Comhairle

I understand that amendment No. 9 now reads as follows: "In page 3, subsection (1), line 1, to delete ‘A Minister of State' and substitute ‘The Minister or the Minister for Finance'".

Mr. O'Malley

That is correct.

Amendment, as amended, agreed to.

Mr. O'Malley

I move amendment No. 10:

In page 3, subsection (1), line 4, to delete "that Minister" and substitute "the Minister".

Amendment No. 10, amended, by leave, by the substitution of "such Minister" for "the Minister".

An Ceann Comhairle

I understand amendment No. 10 now reads: "In page 3, subsection (1), line 4, to delete ‘that Minister' and substitute ‘such Minister'".

Amendment, as amended, agreed to.

Mr. O'Malley

I move amendment No. 11:

In page 3, subsection (3), line 13, after "Minister" to insert "with the approval of Dáil Éireann".

After: "The Minister for Finance may, after consultation with the Minister" we want to insert "with the approval of Dáil Éireann". The subsection goes on to read: "and subject to the Agreement, sell, transfer or otherwise dispose of any shares of the Company held by him under this Act."

This is the subsection which allows the Minister for Finance, with the agreement of the Minister for Industry and Commerce, to sell the shares. In the light of all we now know about this whole transaction, and in the light of the fact that over £9½ million of the taxpayers money is being paid to four individuals for their own private use and benefit, and that not one penny is being invested in the company, and that a permanent minority holding is being acquired which it is virtually impossible to convert into a majority holding, and that there is an enormous aura of secrecy and fear, apparently, on the part of those involved in this agreement about disclosing anything other than those things they have inadvertently or otherwise disclosed already, or that have been discovered by various people from time to time, is it not important that Dáil Éireann, as well as having to pass the money for the buying of the shares and agree to the Minister buying them, in these circumstances, should equally have to agree to the Minister selling them and the terms on which he sells them, and the circumstances in which he sells them?

For example, on selling the shares he could put himself and the State in the position that there would be no way of ensuring that this company ever attempted to go into production, or attempted to do so within a reasonable time. Since such a large amount of public money is involved, it is only reasonable that the selling of the shares, just as much as the purchasing of the shares, should have the approval of the Dáil as being the popularly elected assembly and the one primarily concerned with financial matters.

It seems to me that, if the Minister feels it necessary to come to the Dáil to get power to buy the shares, he should also have to get the approval of the Dáil for the sale of them. There is not an enormous difference. There could be a sale by the Minister in a few years time at a huge loss. If the company are refused planning permission, which is by no means impossible, or if they are granted planning permission subject to extremely onerous conditions, for example, subject to the condition that they cannot engage in open cast mining, the value of the company and, accordingly, of the shares the Minister for Finance would hold at that stage, one would assume would be very seriously reduced.

Some future Minister who might disapprove of this whole sorry attempt on the part of the present Minister to enter into a field where he is patently unfit, the commercial mining field, might think the whole thing was a total mess and might try to do some better deal on behalf of the State, and God knows it would not be hard to do a better deal. Alternatively he might decide the State had lost enough and he wanted to cut the taxpayers' loss and he wanted to sell. I do not think he should be allowed to do that privately. Even though he has not got much example from the Minister in the sense that no information, or the very minimum of information is being given in relation to the purchase of the shares, that should not be taken as a precedent that no information should be given to Dáil Éireann at the time when the shares were being sold.

For that reason it is not just important but, indeed, vital that the approval of the House would be forthcoming at such time as the Minister for Finance, in consultation with the Minister for Industry and Commerce, should sell, transfer or otherwise dispose of shares in the company. The most important phrase in the subsection is the phrase "and subject to the Agreement ..." He has not got an unfettered right to sell, quite obviously. He can only sell subject to the agreement. Presumably the agreement stops him selling at a particular time. Why should that be so?

Mr. Esmonde

Because it is a private company.

Mr. O'Malley

The money is the taxpayers' money and it should not be tied up in this fashion.

Mr. Esmonde

The Deputy knows the terms of the Companies Act as well as any other lawyer.

Mr. O'Malley

It is all right to be bound by the Companies Act. I have no objection to that. I have an objection to being bound by the terms of a secret agreement. I am not suggesting the Minister or any other citizen should not be bound by the Companies Act. Unfortunately, some citizens see fit not to abide by its terms. That is beside the point. What is disturbing is that it is not just the terms of the Companies Act or the public law of the land which bind the Minister and his associates, or fail to bind them as the case may be, but in addition to the law of the land the Minister and the taxpayers will also be bound by the terms of a secret agreement. That I object to.

If it is proposed to sell these shares at some future date, either for the same amount or for less, or for more, Dáil Éireann should be informed of the fact and should have to give its approval to any such proposed transaction. I hope the Minister will accept this amendment which is perfectly reasonable. It should be made. I can see no valid reason for not accepting it. I hope we do not get another dose of secrecy to the effect that it would be commercially disadvantageous. We are on anti-secrecy pills for a long time now trying to stop getting sick about that one. If we have to have some excuse I hope it will not be the secrecy jazz. We blew that once and for all when we showed the company have become so secretive that they will not even observe the ordinary law of the land.

Mr. Keating

I understand that is not true. I will be saying something about it in a moment.

Mr. O'Malley

The House should agree to the insertion of the words "with the approval of Dáil Éireann" so that, even if we do not get any information when we are buying the shares, a more enlightened Administration will be on the scene if and when the time comes to sell them and the Dáil will be given some information at the time of selling them and will be in a position to make up its mind as to whether or not it is wise in all the circumstances to dispose of the shares or, perhaps, wiser in the circumstances to hold on to them at a time when the Minister might feel like getting rid of them.

Mr. Keating

Since Deputy O'Malley made some reference to it, I should like to say something about the returns of Bula Limited. I understand the returns for 1974 and 1975 were lodged on 24th January of this year.

Mr. O'Malley

The returns for 1974 and 1975 were lodged on 24th January, 1977. My goodness.

Mr. Keating

Yes, 1977.

Mr. O'Malley

Could the Minister tell us if that is in accordance with the terms of section 125 of the Companies Act, 1963?

Mr. Keating

In regard to the amendment we are discussing I thought that since great play had been made of the unavailability of those returns it was as well that I should tell the House as soon as possible what the situation was.

Mr. O'Malley

The Minister is late. Was the 1976 return made?

Mr. Keating

I do not know the answer to that but, after all, this is February, 1977.

In regard to amendment No. 11 we have a practice that has gone on through the life of the State, one administration after another, and it has not been the practice to make the disposal of shares by the Minister for Finance subject to the approval of the Dáil. It is a long continuing general rule that when property of any kind —there are many kinds obviously that would come into this category—has been acquired from the expenditure of funds voted by the Oireachtas, the management and ultimately the disposal of this property becomes a function of the Executive. There is that division of function between legislator and Executive. The appropriate Ministers are of course accountable to the Oireachtas for their management of the State's property and there are long established procedures for carrying out that accountability duty and function. I regret that I cannot accept the amendment. It would mean a fundamental departure from what has been the accepted and unquestioned practice whatever administration was in office.

Mr. Lalor

The Minister would seem to be quoting precedent in defence of the non-acceptance of this amendment from Deputy O'Malley and he talks of the long-established practice whereby the Minister accepts responsibility. Peculiarly that is what I was thinking of when I spoke on the previous section—the brilliant way that the present Minister for Industry and Commerce succeeds in passing on responsibility to his trained staff when he does not want to accept that he has knowledge, that he has the answers to reply to questions. There is also a long-term tradition in this State that when public property or any Governmental property is being disposed of, Land Commission or Board of Works property or Garda cars, anything held in ownership under any Department for which the appropriate Minister is responsible it cannot basically be sold privately. If one thought over this long enough perhaps one could think of exceptions, but this is a tradition that has been built up and it is a good one because it kills the idea of certain buyers getting preferential treatment. Everything has to go either to public auction or public tender. In this case the Minister objects to an amendment which would mean that shares could not be sold, transferred or otherwise disposed of without referring back to Dáil Éireann.

I can appreciate the Minister's objection to this in relation to what one might call the normal dabbling in shares. Deputy Esmonde would remind me that we are dealing with a private company and private companies are not over responsible in dabbling in shares. This is one of the most brilliant dabbles in the business—£½ million turned into £100 million. As I see it, the amendment does not visualise the type of arrangement where the Minister for Finance in consultation with the Minister for Industry and Commerce would be thinking of selling 5 per cent of the 49 per cent share. I do not think they would think in those terms. What worries me—it worries me in the unlikely event of both Ministers holding the same portfolios following the next election—is the fear that the Minister has succeeded in doing a deal with Tara. Deputy O'Malley and others on this side have been attacked not by the Minister but by a Labour Party spokesman who contributed earlier to this debate. He talked or suggested—I think he went as far as to say openly that the battle on this side was being sponsored by Tara.

Mr. O'Malley

It was Sir John himself who said it.

Mr. Lalor

This is what is worrying me in regard to Deputy O'Malley's amendment, that there might be another agreement that is not referred to in this Bill under which the Minister for Industry and Commerce has promised in return for his 25 per cent share in Tara that he will do a deal with the transfer of the 24 per cent that we are buying. In his Second Reading speech, which I agree can sound reasonable, plausible and laudable, he indicated that he had made efforts to bring the two sides together and that the development of the lead and zinc body in Navan could be most advantageously developed by the linking of both firms so that the development could take place as one complete development. Because of my feeling in this regard, if my suspicions here were to be realised, if there were any foundation for it and that the two opposing factions—I have no reason to try to choose another form of words in this regard—could be brought together, it could arise from the Minister for Finance in conjunction with the Minister for Industry and Commerce under the section selling transferring or otherwise disposing of the 49 per cent shares to Tara for a consideration.

If that were to occur, depending on what might be in the secret agreement, it might not be the worst thing. In the interests of the public who have to pay the £9.54 million we are talking about, a decision by the Minister for Finance in consultation with the Minister for Local Government might not be the wisest decision that could be made at that time. A decision on those lines should be brought back to Dáil Éireann for approval. If the two gentlemen concerned at present were still here at that stage and holding the same positions, I presume they would have the backing of the required number of feet to put it through. This would ensure that the matter would have a public airing. At that stage I would not begrudge him the opportunity of coming back to this House and taking full credit for the 900 per cent profit he would have made on behalf of the people when he is seeking sanction from Dáil Éireann to sell his share in Bula to Tara for £95 million.

Mr. O'Malley

Tara are not stupid enough to buy a minority interest in a private company. They have their heads screwed on the right way like any normal citizen or company.

Mr. Lalor

I accept that. For a long time I gave credit to the Minister for Industry and Commerce for the fact that he would not be stupid enough to pay £9.54 million for 24 per cent of a property when he was advised it was valued at £7.5 million, but we will not go into that. If the Minister were to try to justify opposing this proposal it would be because he would have to come to Dáil Éireann for approval every time he wanted to sell and that would be a terrible situation. I do not think he is involved in that kind of deal.

Under section 4 (3) he appears to be seeking power to dispose of the shares he is buying here. If he proposes to dispose of them at some stage in toto, which is visualised here, the least the Minister for Industry and Commerce of the day could do is to come back to the Dáil and get approval for the sale. I do not think that is asking too much.

Amendment put.

The Committee divided: Tá, 53; Níl, 58.

Tá

• Andrews, David.
• Barrett, Sylvester.
• Brady, Philip A.
• Breslin, Cormac.
• Briscoe, Ben.
• Brosnan, Seán.
• Browne, Seán.
• Brugha, Ruairí.
• Burke, Raphael P.
• Callanan, John.
• Calleary, Seán.
• Carter, Frank.
• Colley, George.
• Collins, Gerard.
• Crinion, Brendan.
• Crowley, Flor.
• Daly, Brendan.
• Davern, Noel.
• de Valera, Vivion.
• Dowling, Joe.
• Fahey, Jackie.
• Farrell, Joseph.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• Gallagher, Denis.
• Gibbons, James.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Herbert, Michael.
• Hussey, Thomas.
• Kenneally, William.
• Kitt, Michael P.
• Lalor, Patrick J.
• Leonard, James.
• Lynch, Celia.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Moore, Seán.
• Murphy, Ciarán.
• Nolan, Thomas.
• Noonan, Michael.
• O'Connor, Timothy.
• O'Kennedy, Michael.
• O'Malley, Desmond.
• Power, Patrick.
• Smith, Patrick.
• Tunney, Jim.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Níl

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Bermingham, Joseph.
• Bruton, John.
• Burke, Joan T.
• Burke, Liam.
• Coughlan, Stephen.
• Creed, Donal.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Dockrell, Henry P.
• Dockrell, Maurice.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Thomas.
• Enright, Thomas.
• Esmonde, John G.
• Finn, Martin.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Griffin, Brendan.
• Halligan, Brendan.
• Harte, Patrick D.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Byrne, Hugh.
• Cluskey, Frank.
• Conlan, John F.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Keating, Justin.
• Kelly, John.
• Kenny, Enda.
• Kyne, Thomas A.
• Lynch, Gerard.
• McLaughlin, Joseph.
• McMahon, Larry.
• Malone, Patrick.
• Murphy, Michael P.
• O'Brien, Fergus.
• O'Connell, John.
• O'Donnell, Tom.
• Ryan, John J.
• Ryan, Richie.
• Spring, Dan.
• Staunton, Myles.
• Taylor, Frank.
• Thornley, David.
• Timmins, Godfrey.
• Toal, Brendan.
• Tully, James.
• White, James.

Tellers: Tá, Deputies Lalor and Browne; Níl, Deputies Kelly and B. Desmond.

Amendment declared lost.

Mr. O'Malley

I move amendment No. 12:

In page 3, subsection (3), line 13, to delete "and subject to the Agreement".

This is the subsection we were talking about on the previous amendment in relation to the giving of power to the Minister for Finance, after consultation with the Minister for Industry and Commerce, to sell or otherwise dispose of shares in this company, the 24 per cent and presumably also the 25 per cent. The enormous limitation there is on the power to sell the shares or otherwise transfer them is that there is only power to sell them subject to the agreement.

Mr. Keating

I understand that this is the normal form of words. I am advised there is no objection whatsoever to the position and I can accept the amendment.

Amendment agreed to.

Question proposed: "That section 4, as amended, stand part of the Bill."

Mr. O'Malley

The longer this goes on the more co-operative the Minister becomes. I do not think we have wasted any time as we have had five amendments accepted today. I invite the Minister to peruse the terms of subsection (3) of this section, as amended, which now states:

The Minister for Finance may, after consultation with the Minister, sell, transfer or otherwise dispose of any shares of the Company held by him under this Act.

The only shares he is acquiring under the Bill are those he is paying for because section 2 (1) says:

The Minister may acquire shares of the Company in accordance with the Agreement.

That was amended to read: "not less than 49 per cent". The subsection further states:

And for that purpose may expend sums not exceeding in the aggregate £9,540,000.

The Minister is acquiring the 24 per cent by the expenditure of £9.54 million. He is getting the 25 per cent free not under the Bill but maybe under the agreement of December, 1975, or some other agreement. Section 4 (3) only allows the Minister to dispose of shares held by him under this Act. He could be in the position that he could sell the 24 per cent but he cannot get rid of the 25 per cent. Is that not very unsatisfactory?

Mr. Keating

That is not serious. That is frivolous.

Mr. Colley

Perhaps the Minister would tell us in what way he is acquiring the 25 per cent as distinct from the 24 per cent?

Mr. Keating

I will let Deputy O'Malley make his point.

Mr. O'Malley

I made my point and I was told it was frivolous, that it was not serious. I was a little taken aback by being told that because I doubt if my contributions on this Bill could be described as frivolous, whatever way one might describe them. The Minister for Finance may dispose of any shares of the company held by him under this Act. The Minister under this Act is buying shares. We know that he is getting a free gift of other shares. He is getting them presumably under the agreement of 12th December, 1975. He is not getting them under this Bill.

The question of free shares in this company or in any other one is not referred to here. It seems to me that the free shares are not included in the disposal subsection, subsection (3). We are entitled to ask if there is any provision in the agreement relating to the sale of the shares or is the Minister entitled to sell, wherever he can, in the normal way subject only to the provisions of the Companies Act, 1963, or are there any limitations on his power to sell or his right to sell contained in the agreement?

Mr. Keating

The position is that the Minister is acquiring 49 per cent under this Bill as amended. Subsection (3) of section 4 says: "held by him". It does not say: "held by him as a result of any particular process". The process of acquisition is not defined.

Mr. Colley

What was the process of acquisition of the 25 per cent?

Mr. Keating

I am not saying anything that has not been said many times before. The 25 per cent are free of charge. Those shares are transferred to the Minister.

Mr. Colley

Are they being acquired under the agreement referred to in section 1 or separate from the agreement?

Mr. Keating

I previously said and made it quite clear, and without going further into the agreement than I wish to go, that they are being acquired under the agreement.

Mr. O'Malley

Has any money passed in relation to those shares up to now?

Mr. Keating

No.

Mr. O'Malley

Has no money been paid?

Mr. Keating

No.

Mr. O'Malley

Was there not a date for payment 90 days after the date of arbitration? The date of the arbitration award, as far as I recall, was the 12th November, 1976. The 90th day after that would be approximately the 8th or 9th February, 1977, which date has now well passed. In the light of that was there not a payment made on that date, partial or otherwise?

Mr. Keating

No.

Mr. O'Malley

Are there provisions in the agreement for the payment of interest to the vendors if the payment is not made on the 90th day after the arbitration?

Mr. Keating

I will not go further into the agreement.

Mr. O'Malley

Would the rate of interest that would normally be payable where a purchaser fails to complete his purchase on a certain date not be a penal or quasi-penal rate? Is the Minister aware that it is not infrequent in agreements of this kind to provide for a rate of interest somewhere in the region of not less than 15 per cent and not more than 19 per cent? Is it the position that the State is incurring interest liability of that nature or, perhaps, less or more, depending on whatever the arrangement is?

Mr. Keating

I have indicated that I am not going further into the agreement.

Mr. Colley

Why? Would the Minister explain to us in what way could the Minister's answer to that question be in the least damaging to the company or its commercial interest?

Mr. Keating

I should like to refer the Deputy to the parts of this debate when that was dealt with at considerable length.

Mr. Colley

The Minister will appreciate that he has, in fact, disclosed certain terms of the agreement.

Mr. Keating

Of course, I have. How could I talk about the agreement without disclosing certain parts of it?

Mr. Colley

The Minister disclosed certain parts which he did not disclose originally and he did so, apparently, for his advantage. I do not wish to go back over all the ground we travelled before but Deputy O'Malley raised a pertinent point. If the Minister cannot give us any good reason for not disclosing that point in relation to the agreement, I suggest he should disclose it in the way he has disclosed other items.

Mr. Keating

The matter of closure is in the hands of the legal experts on the two sides at the moment and I am not prepared to go further into the details of the agreement at this time.

Mr. Lalor

When opening the debate on the Second Stage the Minister told us that the money was payable in instalments, 50 per cent in 90 days, 25 per cent within one year and the remaining 25 per cent within two years. I was given to understand that earlier the Minister was very anxious to get this Bill through in the week Second Stage was introduced. Second Stage was introduced on 1st February and we were given the impression that it had to be through both Houses of the Oireachtas at an early date in order to make the payment provided for in the Estimates within 90 days of the arbitration award. My fear is that during the general election campaign the Minister for Industry and Commerce will stand up in Thurles and maintain that he got a good deal in buying the 49 per cent share of Bula for £9.54 million and telling the people that he had to pay another £500,000 interest because he was held up by Fianna Fáil. The Minister has refused to disclose the information which has nothing to do with the commercial activity of Bula. Surely, in any agreement like this there must be some type of penal clause and the Minister should be more open in relation to it, if it exists.

Mr. O'Malley

In connection with the necessity for meeting these payments by the 90th day after the arbitration award, I recall that at 11.45 a.m. on Saturday 29th January, 1977, I received a telephone call in Limerick from the private secretary to the Minister for Industry and Commerce. He told me that a Bill relating to Bula had been passed by the Government, that a copy of it would be posted to me that night, that I would have it, hopefully, on Monday morning, 31st January, and that the Minister was very anxious that I agree to take it on Tuesday, 1st February. He said the Minister was anxious that I let the Bill go through all Stages very quickly as it had to be passed by both Houses of the Oireachtas and signed by the President before Wednesday, 9th February. He said there was a strict obligation to have it in law at that time so that payments due could be made.

I told the private secretary that it was not my fault if the Minister let it go so late in the day to introduce such a Bill and expect that a Bill like this be taken at 24 hours' notice. I told him I had no intention of doing that. The Minister's private secretary seemed to be very concerned that the Bill be passed by both Houses before 9th February and I understand a similar plea was conveyed to our Chief Whip, Deputy Lalor, by the Government Chief Whip, Deputy Kelly. Deputy Lalor, in the course of a telephone conversation, told me that the Government wanted the Bill passed in a matter of days and asked if I was agreeable. I told him I was not.

It seemed, from the agitated state of mind of the Minister's private secretary and of the Parliamentary Secretary to the Taoiseach, that there was a heavy onus or obligation to have this Bill passed by 9th February. That date has been passed and the state of agitation seems to have diminished considerably, with benefit all round. It no longer appears to be a matter of great concern. I would be surprised if an agreement of this kind did not contain a provision whereby interest was payable. I have been involved in a lot of transactions as a solicitor and I am aware that if a closing date is fixed there is always provision in the agreement that if the purchaser does not complete by the closing date he pays interest. In the old days it was 5 or 6 per cent but in Coalition times the figure is usually 17, 18 and even 19 per cent. Interest at 17 or 18 per cent per annum on this kind of money would be very substantial. The Minister has not denied there is such a provision and he cannot prevent some of us drawing the conclusion that it exists. He cannot prevent an objective observer from coming to that conclusion.

During the Second Stage debate the Minister disclosed parts of the agreement in order to prove that I was marginally wrong in some of my observations. I told him he was being selective and I said he was not right to pick out bits and pieces to prove that I was marginally wrong. Because he was selective at that time he cannot afford to be so on Committee Stage. His set of standards in this respect may be different from those of other people and he may decide that selective disclosures on Second Stage may not apply on Committee Stage because it may be inappropriate. I do not think most people would look at it in that way and, therefore, we are forced to the conclusion that there is a penal interest clause in the agreement—that the State may be incurring substantial further liabilities.

Mr. Keating

I will give an undertaking to Deputy Lalor that I will not claim that the Opposition forced me or the Government into the position of paying interest. My legal advice is that there is no interest payable.

Mr. Colley

That is reassuring, but would the Minister explain why, through his private secretary, did he endeavour to get the Bill through the day after its arrival at Deputy O'Malley's home, and to get all Stages by 9th February?

Mr. Keating

It was not an interest reason. We had said that from the time of the arbitrator's award we had 90 days and I was endeavouring as well as I could to discharge that obligation. I regret I did not succeed.

Mr. Colley

One understands the Minister's endeavour to meet the obligation, but does he not agree it was a rather poor effort to meet it when it involved the introduction of the Bill one day and its passage on the next day?

Mr. Keating

I do not accept that version. I had hoped to have it by 9th or 11th February but I had no expectations of getting it through in one day.

Mr. Colley

A day-and-a-half. That is a very poor effort to meet the obligation. The trouble arose because the Minister produced the Bill far too late. In regard to subsection (1), can the Minister indicate the kind of situation sought to be covered by the provision for persons to be nominated to hold shares?

Mr. Keating

I understand this is standard in the circumstances where, in the appointment of directors, they may be required to hold some shares. It is, therefore, necessary to have this provision but that is no special reason.

Mr. Colley

In relation to this particular company, is the holding of a share or shares necessary in order to qualify for a directorship?

Mr. Keating

I am informed it is not a regular obligation but that it may be considered desirable.

Mr. O'Malley

The Minister referred to the question of his directors. Who will his two nominee directors be?

Mr. Keating

I am not in a position to say at the moment.

Mr. O'Malley

Has the Minister decided on two people or not?

Mr. Keating

The names are under consideration but not in a final way.

Mr. O'Malley

Is one of his proposed nominees to a directorship of Bula Limited also a director of Tara?

Mr. Keating

No directors have been appointed—names are being considered.

Mr. O'Malley

Is one of the names being put forward to Bula designated——

Mr. Keating

We have not put forward anybody.

Mr. O'Malley

Is it intended to have one of the Minister's nominee directors of Tara Ltd. on the Bula board also?

Mr. Keating

That has not been settled yet.

Mr. O'Malley

I know it has not been settled but was that the intention?

Mr. Keating

No.

Mr. Colley

What limitations, if any, exist on the sale of shares in this company? I refer to subsection (3).

Mr. Keating

This is one of the things I am not prepared to go into.

Mr. Colley

Is that on the basis that the provision arises on the agreement?

Mr. Keating

Yes.

Mr. Colley

Two further points, therefore, arise. The Minister will appreciate that it is normal practice in private companies to have certain limitations on the sale of shares, that before they can be offered to anybody else first refusal must be given to existing directors or shareholders. Is there any such provision in this case?

Mr. Keating

I am sorry: Someone was speaking into my other ear. Would Deputy Colley repeat the question?

Mr. Colley

I was asking whether there are any limitations in the memorandum and articles of association of this company on the right to dispose of shares.

Mr. Keating

I understand there are some.

Mr. Colley

Presumably in more or less the normal form, if that phrase is not too wide.

Mr. Keating

I believe it is normal.

Mr. Colley

There is a second point arising out of what the Minister said. He told us he was not prepared to disclose limitations other than the memorandum and articles of association because they were contained in the agreement and, in pursuance of the policy he is partially adopting, he is not disclosing these. If there are limitations in the agreement in regard to the disposal of shares, how was the Minister able to accept Deputy O'Malley's amendment in regard to deleting the words "subject to the agreement" because, if such limitations exist, that is presumably why the phrase was in, but the Minister has accepted an amendment to delete these words?

Mr. Keating

I was advised that it was perfectly proper to accept the amendment and there was no difficulty about it.

Mr. Colley

I am sure the Minister will see that a certain problem arises which requires some explanation other than the Minister was so advised. He has now told us the agreement contains limitations on the right of a shareholder to sell, transfer or otherwise dispose of shares in the company. Therefore, on the face of it, the words "subject to the agreement" are necessary and were put in for that specific purpose. It is not sufficient, I would suggest, simply to say that the Minister was advised he could drop these words because, if such limitations exist in the agreement, then the words the Minister has agreed to drop are necessary.

Mr. Keating

I can only reiterate that my advice is that the words are not necessary and so I could accept the amendment. There was not, in fact, a conflict.

Mr. Colley

The Minister can see. I am sure, without being a lawyer, that there is some reason on the face of it in the case I am putting forward.

Mr. Keating

I can see that that would depend on the nature of the——

Mr. Colley

Limitations?

Mr. Keating

Yes.

Mr. Colley

I appreciate that.

Mr. Keating

I am advised the phrase is not necessary in this case.

Mr. Colley

If there are limitations at all, they are limitations over and above what might be called the normal ones to which we have referred in the memorandum and articles of association and they are limitations arising out of the agreement. I have no doubt that that is why the draftsman put in the phrase "and subject to the agreement". May I say that, when the Minister agreed to accept that amendment, the clear implication as far as I was concerned was that, whatever else was in the agreement, there was no limitation on the right to dispose of the shares until the Minister told us there was in fact such limitation? It seems to me on the face of it there is an inconsistency here which requires an explanation.

Mr. Keating

The position is that that was looked at by people familiar with the implications of it and they assured me that it was in order for me to accept the amendment.

I want now to clarify the position with regard to a member of my staff. I think it will be understood that when mention is made here of a member of my staff it is only proper that I should clarify the situation. I want to make reference, therefore, to what Deputy O'Malley said about telephone calls from my private secretary in connection with the bringing forward of this Bill. My private secretary spoke to Deputy O'Malley on Saturday, 22nd January, and asked him if he would be prepared to take the Bill on Wednesday, 22nd January.

Mr. Colley

There is something wrong with the Minister's dates. He said 22nd January for both dates.

Mr. Keating

I am sorry. I should have said Saturday, 22nd January, and Wednesday, 26th January. Deputy O'Malley said he would be prepared to take it the following week, 1st February. Now I am informed that, when there was a matter of 24 hours notice to take the Bill on 1st February, Deputy O'Malley had, in fact, been spoken to on Saturday, 29th January, but I am informed also that there was no question—indeed, I said this to Deputy O'Malley a few minutes ago— of taking all Stages on 26th January. I understand my private secretary asked merely that the Second Stage would be started. Deputy Lalor said— this is to clarify the record; Deputy Lalor is the Chief Whip—that he was agreeable, as Whip, that the Bill would be taken on 26th if Deputy O'Malley agreed. I simply say this not to make the matter contentious, but simply for purposes of clarification. It need not be a contentious matter, but it is only fair to say that we did not in fact, expect all stages. Deputy Lalor was prepared to agree to the Second Stage conditional on Deputy O'Malley being willing and on Saturday, 22nd January, Deputy O'Malley was asked if he would take the Bill on Wednesday, 26th January. That I think is more in the nature of a warning and more in line with proper practice than might have been suggested from the record in regard to what Deputy O'Malley said.

Mr. O'Malley

Obviously, I mixed up the two Saturdays. It was the earlier Saturday and the earlier week. The amount of time I was to get was, in fact, 24 hours longer than I said. Instead of taking it on Tuesday he wanted me to take it on Wednesday. I did not get the Bill until Monday and I did not agree.

Mr. Keating

I think it is a matter of having 24 hours of the Bill in hand——

Mr. O'Malley

Rather than 21.

Mr. Keating

——and four days notice that the Bill was coming on. It is not a matter of contention but where a member of one's staff is brought into contention in that way it is only fair that the matter should be clarified.

Mr. Colley

Before we conclude, earlier we were seeking information on section 2. Would the Minister make clear now that it is his intention when we come back to section 2 to give the information sought?

Mr. Keating

My intention is to give information. With my experience of Deputy O'Malley, it may not be everything Deputy O'Malley would wish to have. In my experience, there is no limit to what he might wish to have but it will certainly be the sort of information I think it proper to give in a matter like this.

Progress reported; Committee to sit again.