Vol. 475 No. 8
I move that the Committee agree with the Seanad in amendment No. 1:
Section 1: In page 3, subsection (1), line 27, "holding" deleted and, "holding," substituted.
This is a drafting amendment which seeks to insert a comma. The need for it was discovered by the parliamentary draftsman since we debated the Bill.
We come to Seanad amendment No. 2 Seanad amendment No. 3 is related. It is suggested that Seanad amendments Nos. 2 and 3 be taken together if that is satisfactory.
I move that the Committee agree with the Seanad in amendment No. 2:
Section 1: In page 4, subsection (1), lines 21 and 22, the definition of "offeree" deleted, and the following substituted:
"‘offeree' means a relevant company—
(a) any securities of which are the subject of an offer that has been made or is intended or required to be made, or
(b) in respect of which, or in connection with which, a person does any act in contemplation of making an offer to holders of securities in that company;".
These and subsequent amendments to sections 16 and 20 were sought by the interim panel after the Bill had passed all Stages in the House. The panel's proposals were the subject of detailed consultations with my Department and the parliamentary draftsman. I am satisfied the amendments are necessary for reasons that I will explain in a moment.
In relation to amendments Nos. 2 and 3, the panel see it as essential to expand the existing definition of "offeror" and "offeree". The reason is that the former, i.e. "offeror" is defined as a person who makes an offer while the latter is defined as a company which is the subject of an offer. When one looks at the definition in the Bill of "offer" one sees it is defined as an offer made to the holders of securities. The effect of these three definitions is to limit the applicability of the terms "offeror" and "offeree" to a situation where an offer has been made; in other words, neither of these parties comes into existence until an offer is made.
The problem with anchoring the definitions of "offeror" and "offeree" to the point where an offer is made is that the panel wishes to regulate for an entire range of scenarios and to be able to make and impose rules, rulings, directions and so on on the "offeror" and "offeree" in respect of certain of their actions taken prior to the stage where an offer is actually made. That is the point of the revamping of the definition — where an offer is contemplated prior to its being made. What the panel has requested is that the definition of "offeror" and "offeree" be redrafted to take in all stages, literally between the point of conception of an offer right through to the making of such an offer. The revised wordings are in amendments Nos. 2 and 3.
I move that the Committee agree with the Seanad in amendment No. 3:
Section 1: In page 4, subsection (1), line 23, the definition of "offeror" deleted, and the following substituted:
"‘offeror' means a person who makes, or intends or is required to make, an offer or does any act in contemplation of making an offer;".
I move that the Committee agree with the Seanad in amendment No. 4:
Section 16: In page 18, subsection (1), lines 26 to 28 deleted, and the following substituted:
"8, in relation to a takeover or other relevant transaction,
(e) on any person in respect of a document furnished by him or her to the Panel in relation to any proceedings of the Panel concerning a takeover or other relevant transaction.".
This is purely a technical amendment. The text remains unaltered. Essentially it lays out the paragraphs slightly differently. The necessity for the change arises from a certain ambiguity created by the existing layout of the text which could be read to imply that the panel should make rules under section 8 in respect of charges to be imposed in relation to proceedings of the panel whereas the clear intention is that the panel be enabled to make charges in respect of the lodging with it of documents in the two specified situations, that is, in accordance with the rules under section 8 or any proceedings of the panel.
It would be inappropriate, in any event, to have or to appear to have a provision for rules in relation to proceedings of the panel in a section relating exclusively to the powers of the panel to impose charges in order to finance its activities. Section 11(1) already provides that the panel shall conduct proceedings or hearings in such a manner as it may determine and section 11(3) specifically gives the panel powers, on the production of documents by the parties to such proceedings and hearings.
Amendment No. 4 makes it clear that rules under section 8 do not have to have any provisions in relation to proceedings of the panel. The effect of the amendment is to set out the last two lines of section 16 (1) (d) as new separate subparagraphs 16 (1) (e).
Section 16 refers to the power of the panel to impose charges. Is a substantial change being made to the charges that issue to offerors or offerees who fund the takeover panel?
No fundamental change is being made. The amendment clears up potential ambiguity in the section. I am not convinced there is such ambiguity, but the interim panel is of the opinion that there might be an ambiguity if the section were left unamended. The text is unaltered. Subsection (d) will be the first line of the current subsection (d). The amendment makes a new subsection (e) of the text from "on any person in respect of a document furnished by him or her...".
There are no fundamental changes in charges. The interim panel is currently considering the schedule of charges it might impose with regard to its functions. I have not seen the charges but I presume they will be no more than is required for the discharging of the panel's functions. Depending on what they consist of in a given year, the charges might be modest or of some significance if a significant case came before the panel.
Is it not the intention that the panel be self-financing?
Yes.
I presume the Stock Exchange will make its contribution and that members of the Stock Exchange will be the contributors.
It might be the companies involved in the transactions rather than the members of the Stock Exchange.
So there is no major change from what was agreed?
No.
Amendment No. 6 is related to amendment No. 5. I suggest amendments Nos. 5 and 6 be debated together. Is that agreed? Agreed.
I move that the Committee agree with the Seanad in amendment No. 5:
In page 20, subsection (4), lines 33 and 34, "Subject to the provisions of any enactment or rule of law, the Panel may" deleted, and the following substituted:
"Without prejudice to subsection (5), the Panel may, subject to the provisions of any enactment or rule of law,”.
Section 20 (4) currently provides that, subject to the provisions of any enactment or rule of law, the panel may indemnify its officer in respect of anything done or omitted to be done by him or her in the carrying out of his or her duties as such officer. In line with the practice of the London panel, the interim panel wants to be able to take out insurance policies in respect of its officers against possible legal actions against them for defamation in other jurisdictions.
However, the panel sees the provisions of section 200 of the Companies Act, 1963, as prohibiting it from taking out such insurance. This provision is seen as preventing a company from taking out insurance to indemnify an officer of the company from liability for a specified events, negligence, default, breach of duty or breach of trust. Any policy of that nature taken out by a company is rendered void except in the restricted circumstances set out in the section. Given the nature of the panel's functions, it is important we remove any doubt about the capability of the panel to take out such insurance. However, this solution does not amount to a disapplication of section 200 of the 1963 Act in respect of the panel. The solution involves a slight amendment to the existing subsection (4) and the provision of a new subsection (5). The proposed solution is acceptable to the panel.
This amendment indemnifies the panel against liability that might occur for mistakes or errors of judgment the panel might make. Is that fair to the offerors or offerees? If the panel makes a bad judgment in a takeover case it could cause a substantial loss for the participants.
The fear in this case arises from a defamation case in another jurisdiction. The panel would normally have the indemnity to which the Deputy refers. This amendment makes it clear the indemnity will apply in a case arising in another jurisdiction. One would be unlikely to get people to serve on a takeover panel if they personally were liable for errors or omissions made in good faith. It does not prevent a company which believes it has been the subject of negligence from prosecuting an action. It merely means the directors of the panel would be indemnified. If the members of the panel act in male fides, it is a different matter. If the directors or members of the panel were to act in bad faith, the aggrieved party could institute proceedings for negligence and the panel would be liable.
I move that the Committee agree with the Seanad in amendment No. 6:
In page 20, between lines 37 and 38, the following new subsection inserted:
"(5) The Panel may indemnify any member, director, officer or employee of the Panel in respect of any liability on his or her part to pay damages or costs by reason of anything done or omitted to be done by him or her in the carrying out of his or her duties as such member, director, officer or employee, being a liability that —
(a) has been determined in proceedings before a court or tribunal of another state or arises by virtue of an agreement entered into in settlement of proceedings before such a court or tribunal, and
(b) would not have been determined if the provisions of this section had been applied in those proceedings by the court or tribunal or, as the case may be, would not have been the subject of an agreement as aforesaid but for the reliance, in good faith, by the member or other person aforesaid on any legal opinion or advice to the effect that the provisions of this section would not be applied by the court or tribunal in those proceedings.".
Agreement to Seanad amendments is reported to the House and a message will be sent to the Seanad acquainting it accordingly.
I welcome the Bill. It will improve our international reputation as a high growth economy. Many takeovers have taken place in this country. When Irish Distillers was taken over by Pernod Ricard the London Takeover Panel had responsibility because we did not have a regulatory authority. We have made great progress. This Bill will help our country and the people who invest in it. We have a small Stock Exchange, with approximately 86 members, and I would like to see more people participating in it. It encourages privatisation and a modern economy and there is nothing to be said against that. It gives the public a right to invest. This Bill gives us necessary independence in the financial sector and I hope it is implemented speedily.
I concur with the Deputy's sentiments. I thank the House for facilitating the conclusion of this business and Deputy O'Keeffe for his interest in the Bill on all Stages. This is a complex and detailed area of law and I thank my officials for their painstaking work on this legislation over a long period.
I also thank the Minister of State and his officials for their assistance on the technical aspects of this Bill. The Minister of State and I worked well together in our endeavours to ensure the country has proper legislation and an effective takeover panel. I look forward to confronting the Minister of State when dealing with future legislation and I hope he will accept amendments on Committee Stage of the Credit Union Bill.
