This section begins "notwithstanding anything contained in the Companies Acts or in the memorandum or articles of association of the Company, the share capital of the Company shall be ...". Could the Minister explain why this issue is exempt from the Companies Acts?
Kilkenny Design Workshops Bill, 1982: Committee and Final Stages.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill".
I cannot think of any immediate reaction to that question beyond the fact that this is a subsequent piece of legislation to the Companies Act and any subsequent piece of legislation supersedes what went before. This is the final word as far as KDW are concerned and the Companies Act under which the body was incorporated was the previous enabling legislation. We now have new enabling legislation and this supersedes the provisions of the Companies Act. I am informed that this phrase usually appears in Bills of this sort but perhaps that is not a very good reason for putting it in on this occasion.
The English language as is spoken and as is known by me does not usually appear in Bills. Irrespective of what the Minister has said the word "notwithstanding" seems to me a defect in this or any other Bill. Unfortunately it appears again in section 8. The Minister suggests that there may be other legislation pending but it weakens the Bill to have the word "notwithstanding" in that section. I would like him to consider that this Bill will stand or fall under the Companies Act just as any other Bill would stand or fall under that Act.
The wording has been prepared by the parliamentary draftsmen under the direction of the Attorney General and I presume he is satisfied that it is necessary. As very much an amateur lawyer I would not like to quarrel with him as to whether he is right or wrong. It would seem to me, on a layman's reading of it, to be superfluous. I can see a lot of merit in what Senator Lanigan said. Perhaps the section should start "The share capital of the company shall be" without putting a dressing on it which is not necessary. However, the phrase has been put there by people more expert than us. It does not do any harm to the Bill except add very marginally to the printing costs.
One of the problems in this and the other House is that people who draft the Bills do so from prescribed drafts. We are putting through a very important Bill. I am not a lawyer and it is said that it does not take from the Bill to include the phrase but I suggest it be withdrawn in the interest of clarity. If a matter is contested in the Supreme Court does this Bill supersede the Companies Acts or vice versa?
This Bill supersedes the Companies Acts in so far as it is concerned with the matter contained in the Bill because this Bill is subsequent to the Companies Acts and was enacted later. I will give the Senator this undertaking: I will make formal inquiries from the Attorney General as to the necessity for including this clause in this Bill and in legislation of this type. On receipt of his reply, I will consider communicating the conclusions to the Senator if that is not breaking the bounds of propriety.
I have sympathy with Senator Lanigan. There are a few comments I would like to make on this section and the points that have arisen. It is clear that we definitely do need "Notwithstanding ... the memorandum or articles of association" because the memorandum indicates that this is a private company and under this Bill is no longer a private company. We say notwithstanding the fact that the memorandum and articles of association say that the capital is £100, the capital will be increased under the Bill. It may well be that there are other points in the Companies Act that also require "notwithstanding".
What Senator Lanigan said is a very strong argument in favour of something I know is close to the heart of this Minister, namely, the way in which this House goes about its business. Here we are in a Committee of the full House. We have this legal language before us. Any time a question like this comes up, the advice given to the Minister is "That is what the parliamentary draftsman said", and he is expected, as a parrot, to answer the Senator by saying "That is what the parliamentary draftsman has said". If we had a real Committee system and we came to this problem we could have the parliamentary draftsman here to justify himself. I hope what Senator Lanigan said not only prompts the Minister to deal with this point but stimulates him further in his desire to reform the working of the Houses of the Oireachtas.
Question put and agreed to.
Sections 3 to 7, inclusive, agreed to.
SECTION 8.
Question Proposed: "That section 8 stand part of the Bill".
Notwithstanding the fact that this section starts with "Notwithstanding", I am not going to refer to that wording. Here the Minister proposes that no change can be made in the memorandum without his consent. I agree with what he said in his reply on Second Stage — that it would be better if the main objects of the Kilkenny Design Workshops were set out in legislation. That would mean that any amendments would require legislation and, therefore, would have to come before both Houses of the Oireachtas.
If the Minister, on examination and in discussion with the Kilkenny Design Workshops, considers that a change is necessary, the position will be that while the Minister will be fully party to the changes that are made, the Houses of the Oireachtas will not know of them until and unless they are included in the subsequent annual report when they could possibly be debated. This section might have been better if it had provided that any changes in the memorandum or articles of association had been subject to annulment by the Houses of the Oireachtas or subject to positive confirmation by them.
This raises a very broad question. What Senator Dooge has been talking about is the memorandum and articles of association of any company. When anybody sets up a private or limited company at this stage, he puts in every possible thing they might do. It might turn out that in the end the company, which is a mining company, might buy property and somebody has forgotten to put in the purchase of property in the articles. This means that legally speaking they are not entitled to buy property. In company law it is irrelevant what a company is set up for as long as it is properly structured and run. The memorandum and articles of association do two things: they give lawyers a high income trying to find out where loopholes might arise, and they give printers a huge income because every company is now extending the range of its memorandum and articles of association and the printers clean up.
Company law is not strengthened, in fact in this country company law is diminishing. The problems within company law are increasing. There is no protection within company law for somebody who is owed money. If you drive a car at 35 miles per hour in a 30-mile zone your name will be in the paper. If you are caught in a pub after hours your name is in the paper. If you kill somebody your name is in the paper but if you owe somebody £1 million your name will not be in the paper as long as you do not steal it from a public company. The protection the Companies Acts give is being diminished. The Minister has a memorandum and articles of association for KDW which I am sure will cover every conceivable thing that they might do, but it gives no protection for anything and gives no protection to anybody either.
There is a distinction here between the aims and objectives of a State company, using State funds, and the memorandum of a private company. For example, where one is giving out public funds, the objectives in the interest of parliamentary control have to be fairly precisely and narrowly defined. In the case of a private company operating within the very real constraints of profit and loss, it does not matter what objectives it is given as long as creditors are protected — that is not a matter for this debate. My concern is to have the objectives of KDW defined in statute, not from the point of view of the protection of creditors or the type of concern that normally motivates people in drawing up a memorandum and articles of association, but more from the point of view of parliamentary control.
An adequate opportunity will arise for a debate on the objectives of KDW when the legislation is introduced. When we will be talking about the real objectives of the company rather than material in the memorandum and articles of association, which could be of a very detailed and administrative kind, it would be more appropriate to incorporate the type of procedures Senator Dooge has referred to rather than trying to do it at this stage.
Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill".
A new issue of shares in the company shall not be made unless the Minister for Finance, after consultation with the Minister, has authorised the issue. This raises many questions. Who can authorise an issue of shares? According to this, the Bill is brought forward by the Minister but the Minister cannot issue shares unless he consults with the Minister for Finance. Where does the ultimate responsibility lie? Does the Minister for Finance decide who has shares in an extended KDW or in any State company? Under what restrictions does the Minister of the day operate as Minister for Finance when he is issuing public shares?
At the moment the issue of shares by the company should not be made unless the Minister for Finance, after consultation with me, has authorised the issue. In fact, the Minister for Finance will be issuing the shares to himself, because he is the only shareholder. The section is there in the event of its being decided to issue shares, either on a majority or on a minority basis, to the public or to the other people apart from the State itself as represented by the Minister for Finance. That section is there to allow for that eventuality. There is no thought of which I am aware of doing this at this point. But the section is there and it may be necessary.
Does it not raise the question that on an issue of shares in this company at present the Minister is the only issuer and purchaser, but the section does suggest there can be an issue by people other than the Minister for Finance. What is suggested is that in the case of an issue by somebody other than the Minister for Finance, the Minister for Finance has the right to accept or reject whoever offers for the shares. Surely, if shares were offered they cannot be offered in layman's terms at the behest of a Minister.
The idea is that the Minister for Finance is the overall protector of the assets and liabilities of the State. His job is to ensure that, first of all, our liabilities do not get too large. That is why all State borrowing, by private companies, local authorities and so on is, at least in theory, or should be, controlled ultimately by one Minister, namely the Minister for Finance. Likewise, where you have State assets which are being alienated, as they would be in part if shares were being issued in them to people other than the State, you must have some central person responsible for ensuring, just as he can ensure that we do not run up too many debts, that what we possess is not sold for less than its value. It is appropriate that we should have one central Minister with that responsibility. It should not be possible for the Minister for Industry and Energy to sell off shares in one company and another Minister to sell off shares in another company without some central control on the overall assets of the State as a whole.
Is the Minister, then, giving us a guarantee that shares in the KDW will not be offered on the open market?
I did not say anything of that nature at all. I said much earlier in my contribution that there was no thought of doing this at this point. I can assure the House that it is highly unlikely that a major policy departure of this nature would occur without very full debate taking place on it here in this House and without very mature deliberation on it. There is no proposal at this point to change the shareholding base of the KDW.
So the Minister is giving a guarantee that if the structure of the KDW is changed to issue shares to the public there will be a full debate in the House beforehand and that section 9 will not preclude any such debate.
That is a reasonable request for the Senator to make. It is very proper, for that issue, to do that and I will give him that assurance.
Question put and agreed to.
Section 10 agreed to.
SECTION 11.
Question proposed: "That section 11 stand part of the Bill."
I would like to raise a point about a phrase which occurs twice in section 11, the phrase "as soon as may be". When I encountered it in the first line in the section, I wondered what it meant, because it is here that we read "the company shall, as soon as may be after the end of the accounting year furnish a report". Then later on in subsection (3), the exact same phrase is used that "the Minister shall submit it to the Houses of the Oireachtas as soon as may be". In the case of the last annual report, I find that "as soon as may be" in regard to subsection (1) is not quite the same as "as soon as may be" under subsection (3). Could the Minister give any indication of what he thinks would be a reasonable interpretation of "as soon as may be" in subsection (1) of section 11 and what would be a reasonable interpretation of "as soon as maybe" in subsection (3)?
In the first instance, we were talking about the furnishing of the accounts to the Minister and in the second instance we are talking about them being laid before the Houses of the Oireachtas. Obviously there is going to be a different time for these two events because before they are laid before the Houses of the Oireachtas the Government have to consider them and approve them for issue. That would explain the difference.
Clearly, I would encourage the Minister to ensure that in both cases the term "as soon as may be" is construed to be as short as possible.
I am very concerned about delays in the presentation of State body accounts. It is something on which I campaigned myself in the Dáil on a number of occasions, showing in one instance a case where a very important subsidiary body in 1979 had not produced their accounts for a period as far back as 1973. I understand that the accounts of the KDW for 1981 were presented in September 1982. I would prefer to see, and will enjoin all companies under my aegis to ensure, that their annual report and accounts are presented to the Houses of the Oireachtas not more than six months after the end of the year upon which they are reporting. Reports received any later than that in this House are not really adequate.
I would also like to see the House considering ways in which it would look at these reports. We all get these in our post. Most of these do not stay very long on our tables, shall we say, and they probably go in the direction of the waste paper basket very soon. The main reason for that is, not that they are not interesting but that there is no way in which we can make use of the knowledge contained in these reports or ask anything meaningful about them, so we do not bother with them. I would like to see this House and perhaps the other House establish a joint committee to look at reports of this kind from non-commercial bodies and go through them in a systematic way so that Members would have an opportunity to ask questions about them and so of monitoring their activity.
On that point, after the end of the year I would feel that it is important to have the presentation to the Minister for Finance within two months. I feel also — I would certainly agree with Senator Dooge — that it is important that we should have these reports as soon as possible. But I do not think that we should have them in the glossy presentation packets that we are getting at present. The Minister has said that they generally end up fairly fast in the wastepaper basket. We get glossy presentations from a number of State bodies, presented in red, in green, graphs that go up and down, and they are dumped in the wastepaper basket. They got someone's money, they made or they lost so much money. Three pages would be enough to explain why.
I hope that anything Senator Lanigan has been saying——
At this late hour would Senators Lanigan and Dooge excuse the rest of us if we try to get home?
I thank Senator Ryan. I was hoping somebody would say it.
I am undeterred by any attempt to stop me doing my duty as a Senator. I thank the Minister for indicating his objective to have this information in our hands in six months. This is reasonable. Equally reasonable is his request that having received it we should discuss it in a realistic fashion.
Question put and agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."
I feel I must comment on the section in regard to the disqualification of a member of the board if nominated for Seanad Éireann. I regard such disqualification as reasonable if a person gets elected to the Seanad. However, I question the reasonableness of disqualification immediately on nomination. It does not require the consent of a person to be nominated for Seanad Éireann because it is open to any body on the register of nominating bodies to remove a person from the board of the Kilkenny Design Workshops by nominating him or her. This is a defect in our legislation, not just in this Bill but in others. I do not ask that it should be amended here or that we should seek to recall the other House in Christmas week, but I suggest it should be looked at in future.
I agree. The Senator has made a reasonable point. I made that point in the other House. I understand this is common wording in all legislation of this type. Therefore, it is a matter that should be considered by the Government as a whole in future legislation of this kind. I will consult with the Attorney General and if necessary bring it before the Government for possible amendment.
Question put and agreed to.
Section 13 agreed to.
SECTION 14.
Question proposed: "That section 14 stand part of the Bill."
The section simply states that payment should be made by the company to its chairman and directors. However, there is not a section in the Bill which states how members of the board are to be appointed and I should be obliged if the Minister would give me an indication as to how members of the board are to be appointed in future.
The directors at the moment are appointed by the Minister. This is a wholly-owned State company and it is not unreasonable that the State should appoint the directors.
Does this mean that irrespective of the time when people appointed by the Minister as members of the board they would not be legitimate members if there was a change of Government a short time after appointment?
I think it is only reasonable that the Minister would have power, as he has in all such cases, to remove the board, because their appointment is an expression, in the first instance by the Minister, of the will of the people. Naturally, if the will of the people changes and a new Minister is appointed, the mandate is given to the new Minister to undo the work of his predecessor. It is an expression by the Minister of the will of the people.
The Minister has said that the Minister of the day has the ultimate right to appoint directors and he suggested that the will of the people would dictate whether they would stay or not. My opinion is that the will of the people does not dictate whether directors would stay or not because the will of the people does not dictate who will be Minister. What I am asking is that if directors are appointed by a Minister is there any guarantee that there will be normal progression as there is in any other type of company in regard to directorships.
I am not aware that this situation has arisen in regard to this company. Perhaps the Senator would indicate what he means in so far as it affects KDW. I should like to help him. Has he a fear that a subsequent Minister might wish to undo an appointment I might make?
There is no reference in the Bill to the method of appointment of directors. However, it is stated that the Minister shall do certain things in regard to fees, if any. I want the Minister to tell me the situation in regard to all public companies.
My predecessor appointed four members to this board. I, as Minister for Finance in an outgoing Government, found a number of vacancies on a number of boards which I could have filled. I deliberately did not fill those vacancies because I believed it to be right that an incoming Government should have an opportunity to fill them because the new Dáil would decide on a new Government and I regarded it as right that the Government selected by the new Dáil would have the right to make the appointments. That did not happen in regard to my predecessor, though he was purely a caretaker Minister. I would not be very happy with that type of procedure and, therefore, I did not follow it myself when I had an opportunity to do so. I would not be very happy with that type of procedure. As I have said, I did not follow it myself when I had an opportunity to do so. This is the situation. Is Senator Lanigan worried about what my predecessor did in this instance and is he urging me to reverse it? Is that what he wants me to do?
Of course, the Minister has changed the whole parliamentary situation. There is no such thing as a caretaker Minister. The Minister is a Minister until he vacates his chair. Therefore, there is no such thing as a caretaker Government. The Government are the Government until the day they cease to be in office and, as such, have the right as a Government to do what a Government should do. There is no such thing in this country as a caretaker Government.
A lame duck is the correct description.
Question put and agreed to.
Sections 15 to 18, inclusive, agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.