Irish Takeover Panel Bill, 1996: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The Irish Takeover Panel Bill, 1996, provides for the designation of a takeover panel to monitor and supervise takeovers and certain other related activity with a view to ensuring fair and equal treatment of all shareholders in such situations and to provide support and credibility for the Irish financial markets. The companies which will fall within the panel's remit will be mainly those currently listed on the Irish Stock Exchange.

The need for an Irish takeover panel came about as a result of the separation of the Stock Exchange here from being part of the London stock exchange in December 1995 and the decision of the London takeover panel that it no longer wished to have responsibility for takeovers here consequent on that separation.

The question of what form the Irish takeover panel should take was the subject of detailed consideration by a working group representative of the Irish financial markets. The majority view of the working group was that the panel should have statutory backing and the group recommended accordingly to the then Minister for Enterprise and Employment. There was concern on the part of the group that if the Irish takeover panel were to operate other than on a statutory basis, there may not be the same respect for the rules and rulings given, as compared with the London panel. Because of the stature of the London market, parties involved in takeovers there would generally be respectful of any directions or rulings. The ultimate sanction for disobeying of a ruling or direction of the London panel is ostracism from the financial services of the City of London but the panel can rely on the pro-active support of the relevant regulatory authorities in the UK in the achievement of this objective.

For example, the Securities Investment Board (SIB) has imposed the so called "cold shoulder" rule which in essence obliges an authorised firm to which SIB's rules apply not to act for any person in connection with a takeover, merger or relevant acquisition of shares if the authorised person has reason to believe the persons for whom the firm would so act would not be likely to comply with the takeover code. Therefore, given the manner in which the support is rendered by the regulatory authorities it could be said to amount to indirect statutory backing in a key area of the UK panel's activity. However, the industry view here was that limited statutory backing of this nature would not work in Ireland. The main reason therefore for putting in place an Irish takeover panel with statutory backing is to provide support and credibility for the Irish financial market, thereby avoiding any uncertainty arising from the separation of the Irish Stock Exchange from London.

As stated at the outset, the primary task of the panel will be to monitor and supervise takeover activity falling within its remit with a view to ensuring fair and equal treatment of all shareholders. The panel will not be concerned with the financial or commercial advantages or disadvantages of any particular takeover. These are matters for the company and its shareholders. Equally, the panel will not be concerned with issues such as competition, which are the responsibility of the Minister for Enterprise and Employment under the Mergers, Takeovers and Monopolies (Control) Act, 1978, as amended.

Pending the enactment of the present Bill, the UK takeover panel has continued to accept responsibility for monitoring takeovers and related matters which fall within the takeover code. Following the confirmation that the Minister proposed to legislate for a takeover panel, the proposed nominating members of the panel have formed an interim panel and the Governor of the Central Bank has appointed a chairperson designate, Mr. Dan O'Keeffe SC. An interim director general designate, Mr. Leo Conway, formerly of Ulster Bank Finance, has also been appointed. The preparation of the draft Bill has involved close and protracted discussions and consultations with the interim panel.

Against this background I would now like to deal with the provisions of the Bill itself. Essentially, this Bill is concerned with giving statutory backing to a company to be known as the Irish Takeover Panel for the purposes already referred to. The Minister will designate the company for these purposes subject to certain conditions being met—the company must be incorporated under the Companies Acts as a public company limited by guarantee and the Minister must be satisfied that the company's memorandum and articles of association are consistent with the provisions of the Act.

There will be five members of the panel drawn from the various interests in the Irish financial markets. The Minister can, by regulations, alter the membership if circumstances so require in the future. The board of the panel will have seven directors. Each of the members will nominate and appoint one director each. The Governor of the Central Bank nominates and appoints the chairperson and vice-chairperson and he will take account of the general public interest in making these appointments. The directors so appointed can co-opt three further directors as required. There is provision for alternate directors to be appointed primarily to cater for conflicts of interest arising.

The directors will be independent of the members in the discharge of its monitoring and supervisory functions. The panel will operate for this purpose through the medium of detailed rules which the panel itself will draw up. However, in a number of key areas the Bill specifies what these rules must contain and provides in relation to some of this number that the Minister be consulted or approve them.

The rules, which will be modelled where possible on the UK rules, must reflect the general principles set out in the Schedule to the Bill. The Minister can amend the Schedule by regulations after consultation with the panel. The panel can give rulings and directions as required in each case arising. It can apply to the courts to have these rulings enforced, if necessary. An aggrieved party can seek a judicial review in the courts in relation to specific rulings or directions of the panel. The panel will be self-financing and will be required to submit an annual report which will be laid before both Houses of the Oireachtas.

As the Title of the Bill makes clear, the task of the takeover panel will be to monitor and supervise takeovers and other relevant transactions, terms which are defined in section 1 of the Bill. The reference to other transactions would include all matters that are incidental to takeovers, including work on the preparation of a takeover offer.

It also includes substantial acquisitions of securities. These involve ways in which parties acquire shares in a company which falls within the remit of the panel but can only do so at a predetermined rate within specified timeframes.

Other terms defined in section 1 which are also fundamental to the Bill are "acting in concert" and "control". "Acting in concert" is a concept that is very important in the context of activities in which the takeover panel will be interested. Essentially, it deals with circumstances where two or more parties act together. It would be quite easy to avoid the provisions of the Bill if parties were able to so organise their affairs that no one of them fell within the size criteria that are laid down. That would enable interested parties to drive a coach and four through the requirements of the Bill and the rules made by the takeover panel.

"Control" will arise where a party holds, in aggregate, not less than 30 per cent of the voting rights of the company. This is also central to the activities of the takeover panel in that when somebody acquires control, the party or parties acting in concert will have to make a mandatory offer to the remainder of the shareholders.

In terms of the scope of the Bill, section 2 defines the companies to which the Act will apply; that is public limited companies or other bodies corporate incorporated in the State, whose securities are currently listed on the Stock Exchange or have been authorised to trade there within the previous five years. It also enables the Minister to provide, by regulations, that the Act should apply to the securities of other public limited companies in future if the need arises.

Specifically excluded from the remit of the panel will be UCITS and investment companies under Part XIII of the Companies Act, 1990. The former are excluded because of the particular manner and purpose for which the shareholding of such companies are brought together, that is, investors with a common purpose. The same consideration essentially applies to investment companies within the meaning of Part XIII of the 1990 Act.

Section 3 provides for the designation by the Minister of the Irish Takeover Panel as the body to undertake the functions of the panel as set out in the Bill. Certain conditions must be complied with before the designation can take place. The specific conditions are that the panel be registered under the Companies Acts, 1963 to 1990, as a public company limited by guarantee, to be known as the Irish Takeover Panel, and that the memorandum and articles of association of the company be approved by the Minister. Section 3 also specifies the provisions of existing Companies Acts that are disapplied in respect of the panel, and who the members of the panel will be.

There will be five members of the panel and these are the bodies specified in section 6, namely, the Consultative Committee of Accountancy Bodies — Ireland, the Law Society of Ireland, the Irish Association of Investment Managers, the Irish Bankers' Federation, and the Irish Stock Exchange. In the case of any of these bodies not being a body corporate, section 3 provides that an individual or body corporate nominated by the unincorporated body will be the member of the Irish Takeover Panel. The membership of the panel is representative of the various interests involved in the Irish financial markets.

Sections 4 and 5 deal with other matters relating to the memorandum and articles of association of the panel. Section 4 is designed to ensure that following the incorporation and designation of the panel, the members will not be able to alter either the memorandum or articles of association without the prior approval of the Minister.

As already indicated, section 3 provides that the memorandum and articles have to be approved by the Minister prior to the designation of the company. The particular section 4 provision will ensure that no changes are made without the Minister being made aware of and agreeing to them.

Section 5 sets out the principal objects that must be included in the memorandum of association of the Irish Takeover Panel. These are the monitoring and supervision of takeovers and other relevant transactions so as to ensure that the provisions of the Act including the scheduled principles, and any rules made by the panel under section 8 of the Bill are complied with as respects each such transaction. It also provides that the panel can include in its memorandum such other objects and powers as are reasonably necessary or proper for it to enable it to discharge its functions, provided these are consistent with the provisions of the Bill.

Section 6, already referred to, makes provision for the directors of the panel. Essentially, the directors of the panel will monitor takeovers and issue any directions and rulings pursuant to the rules which they make under section 8. Accordingly, it is vitally important that the panel and its directors should be able to discharge their functions without hindrance or other improper direction from the members who have nominated the directors.

The panel will have seven directors. They will be nominated by the five specified bodies already referred to, representing the various interests in the financial industry. In addition, the Governor of the Central Bank will appoint the chairperson and deputy chairperson. The governor will have regard to the general public interest in making these appointments.

In particular cases, conflicts of interest could arise, and it is accordingly proposed that the directors should be able to have alternates nominated to take their place in such circumstances.

In addition, particular takeovers may arise where the expertise available to the panel may be wanting in some respects. In such circumstances, it will be possible to co-opt up to three additional directors to the panel whose term of office may relate to the individual takeovers, but is not so limited.

Because the provisions of section 182 of the 1963 Act override any provision in the articles of a company and provide that the members of a company may remove a director, it is necessary to disapply that particular provision in respect of the panel, given that we want the panel directors to be totally independent of the members who have nominated them.

Finally, provision is made for the Minister to either add to or remove any of the nominating bodies in the future if circumstances arise where this proves necessary or desirable. The consequence of such a removal is, of course, that the director nominated by such a member who is removed should automatically relinquish his position and this is provided for in this section.

Section 7 sets out the general duty on the panel to monitor and supervise takeovers to ensure that the provisions of the Act, including the scheduled principles, are complied with. However, to avoid circumstances where parties try to get the panel to undertake activities that are not within their remit, subsection (2) provides that the panel cannot be compelled to act in circumstances where it would not otherwise be required to.

The section also provides that the Minister may amend the scheduled principles, by regulations, following consultation with the panel. However, these regulations will require the approval of the Oireachtas by way of a resolution.

Section 8 is a key provision of the Bill and will enable the panel to make rules to set out the various requirements to be complied with by parties engaging in takeover activity. In general, the approach is that it will be the panel's own responsibility to draw up the rules in accordance, and in compliance, with the Act. However, in three specific areas, section 8 lays down requirements that must be included in the rules.

Subsection (2) provides that the Minister must be consulted in regard to the determination of what will amount to a "substantial acquisition of securities". The reason this is proposed is that the rules in this instance will determine percentage limits and time limits within which acquisitions can only take place, but which will not result in actual control of a company arising.

For instance, under the present UK substantial acquisition rules, no party may acquire 10 per cent in any company in a seven day period if as a result of the acquisition plus what he already holds, a person would end up holding between 15 and 30 per cent. This follows the same approach as in the case of a takeover in that it is the Minister with the approval of the Oireachtas who will determine the percentage limit as to when control arises.

Section 8(3) provides that the panel must make rules for the making of a mandatory offer where a person acquires control of a company, whether acting alone or in concert with other parties.

The takeover panel rules may also apply to companies that find themselves subject to the Mergers, Takeovers and Monopolies (Control) Act, 1978, as amended. This section provides that the rules must make specific provision for what happens if the Minister, for example, makes a reference under the said 1978 Act to the Competition Authority.

The possibilities that would arise include the actual suspension of the takeover offer while the matter is considered by the Competition Authority and the Minister, through to the actual lapsing of an offer where a reference is made. However, the detailed rules will be subject to the approval of the Minister. The section also provides that the panel may grant derogations or waive rules in the particular circumstances of an individual case. However, this can only be done by reference to the scheduled principles.

Section 9 deals with the power of the panel to make rulings and give directions. As already indicated, there was concern that, if the takeover rules and panel were to operate here other than on a statutory basis, there may not be the same respect, as in the London situation, for the rules and rulings given. Consequently, section 9 is one of the central pillars of the activities of the panel in that it underpins rulings and directions that will be given by the panel. In addition, it provides that where the panel issues rulings and directions, it may publish them. This will ensure that all market participants are aware of the decisions given and taken by the panel. To enable the panel operate effectively it has also to be able to obtain information and this section will ensure that the panel can seek information and the parties who are asked for the information will be obliged to provide it.

Section 10 is designed to ensure that, following appropriate inquiry or examination in the matter, the panel may, if it thinks fit, advise, admonish or censure parties in relation to their conduct in a takeover situation. The section further provides that the panel can publish their advice, admonition or censure.

As a protection for parties subject of the sanction imposed by the panel, such parties will be empowered to apply to the court which, following a hearing on the matter, can either confirm the decision of the panel or annul the decision and make certain orders.

Section 11 is essentially a procedural section, and makes provision for a number of practical matters that will enable the panel to exercise its powers. In the first instance, it provides for the power of the panel to conduct hearings. Secondly, it provides that these hearings can be held otherwise than in public. The panel is given the power to ensure the attendance of witnesses and the production of documents by such witnesses. It also provides for the position of a witness appearing before the panel. Finally, in addition to creating an offence for a person who fails to obey a summons of the panel, section 11 also provides that the panel can make application to the court to enforce the compliance of witnesses at hearings.

Section 12 provides that the panel can apply to the courts to have its rulings or directions enforced.

One major difference between the existing code dealing with takeovers and the new regime proposed under the present legislation is the involvement of the court. As mentioned earlier, the respect of parties involved in takeovers for the code and rulings of the London Takeover Panel derived mainly from the international standing of the UK market. The same could not be said to apply in the case of the Irish market. Accordingly, it is possible that some parties the subject of rulings or directions might, for their own reasons, be prepared to defy the panel. Section 12 is designed to enable the panel to go to court to get the court to enforce a ruling or direction where this is being ignored by the party in question.

When an application is made to the court, the court can make interim or interlocutory orders as it deems necessary. However, the panel cannot apply to the court earlier than seven days from the making of the ruling or giving of the direction. This is designed to allow the party against whom the ruling or direction was made to consider their position and, in particular, consider whether or not they want to make an application to the court themselves under section 13.

In fact, the court is specifically precluded from making an order where such an application has been made. However, the panel may apply and the court may grant interim or interlocutory relief as is considered appropriate by the court under section 13(8). This would ensure that in particular cases, where urgency was involved, and this is likely to be the case in some takeovers, the panel would not be debarred from going into court at an early stage.

While respect for the rulings and directions is a very important feature of the takeover code, inevitably circumstances will arise where a party will feel aggrieved at the rules, ruling or direction given by the panel. Section 13 is designed to provide a mechanism which will enable such parties to have their concerns examined by the courts and where necessary obtain relief. However, it is designed so that applications to the court will not be entertained other than on substantial grounds.

In addition, the timeframe within which applications to the court must be made are extremely tight. However, the court can extend the time limit in certain cases but,inter alia, must bear in mind the nature of the relief that can ultimately be granted. Moreover, where the High Court gives its decision, any appeal to the Supreme Court will only be possible where the High Court certifies that its decision involves a point of law of exceptional public importance. Of course, the right of appeal on constitutional grounds is preserved.

As mentioned in relation to the previous paragraph, this section also ensures that in particular cases, while awaiting the outcome of a judicial review, the court may grant interim or interlocutory relief as it considers appropriate. Overall, section 13 is designed to provide a balanced approach to ensure that parties can protect their interests while at the same time ensuring that takeover activity is not unduly impeded.

Section 14 deals with provisions with respect to appeals, applications, etc., to the court. Time is a huge factor in most takeovers. Accordingly, it is considered appropriate to try to ensure that the courts will be available to deal with matters that arise in particular takeovers and deal with them as speedily as possible.

Furthermore, it is desirable that as far as possible one judge should deal with all applications. This would enable the judge to become familiar with the rules, rulings and directions of the panel and should assist the process of ensuring speedy decisions from the court.

Moreover, having regard to the confidential nature of some of the information in relation to takeovers, this section also provides for the courts in particular cases to hear the casein camera.

Section 15 is designed to ensure that where transactions in relation to a takeover have been completed, the provisions of this Bill cannot be used to have them unwound. In very many takeover situations, once the takeover is concluded, the offeror will immediately move to introduce new arrangements in the company which has been taken over. This could involve the sale of property, the rearrangement of existing facilities, the redeployment of management and so on. It would be invidious to allow for the unscrambling of a takeover once it has been completed, having regard to such circumstances. Essentially, the only circumstances in which a takeover can be unscrambled will be on the basis of an application by the takeover panel itself under section 12. It will be recalled that under that section, where the panel considered that parties were likely to ignore their rulings, they can go into court immediately to have the ruling or direction, etc., confirmed. This would thus become all the more important having regard to section 15(a) where a party could seek to ignore a ruling or direction of the panel in the knowledge that once the takeover has been carried out, no other party other than the panel could seek to have the takeover unwound.

Even where a takeover has been carried out in accordance with a rule, ruling or direction, although this is subsequently declared invalid or quashed, it cannot result in the unwinding of the takeover again, save for the action that can be taken by the panel. For the panel to take such action it would be of the view that the circumstances justified the unscrambling of the takeover and the fair treatment of all the shareholders involved.

Essentially, the panel is going to be self financing and it is not proposed that central Government funds be used to meet any of the expenses of the panel. In the circumstances, it is necessary to give the panel the power to defray the expenses incurred in performing its functions, and section 16 is for this purpose. For example, it is proposed that, subject to the consent of the Minister, the panel will impose a levy on relevant companies and other parties which are involved in a takeover. Before agreeing to any charges the Minister will consult with any persons or parties considered appropriate.

Since the Minister's announcement of his intention to legislate for a takeover panel an interim panel has been in operation. While it is not yet involved in vetting any takeovers as such, much preparatory work has been undertaken. This involved extensive consultations with the Department in the preparation of the draft legislation and subsequently the preparation of draft memo and articles for approval by the Minister as well as the preparation of the draft rules and code together with explanatory notes.

The interim panel has also close contact with the UK panel and has benefited from training and other information provided by the UK panel. It is intended that the expenses incurred by the interim panel can be defrayed by the panel when it becomes operational.

Section 17 is designed to ensure that information obtained by parties directly or indirectly involved in the work of the takeover panel will be regarded as confidential and will not be disclosed other than in accordance with the provisions of the Bill. In this regard, it is provided that disclosure can be made where this is necessary to explain why a particular ruling or direction was given or where disclosure is made to certain parties to facilitate their operation — for example, to the Garda or the DPP. This section also provides a penalty for failure to observe confidentiality.

Section 18 will ensure that information of a confidential nature that would not normally be disclosable in legal proceedings will have the same benefit under this legislation. This could be an important stay on ensuring the privacy of confidential communications between the client and his legal adviser in particular.

Given that it is now proposed to legislate for the operation of the panel, it is considered appropriate that an annual report should be submitted on the activities of the panel and in turn the Minister should arrange for the publication of the report. Section 19 provides accordingly, but in addition requires the panel to have the report with the Minister not later than four months after the end of the year to which the report refers and the Minister to have the report laid before both Houses of the Oireachtas not later than six months after the end of that year.

It also provides that the Minister can prescribe the matters and information that he wants to see addressed in the report, but there is the proviso that information which could materially injure or unfairly prejudice the legitimate interests of any person should not be disclosed in the annual report.

The panel will be operating in a particularly sensitive area and, in that it will be issuing rulings and giving directions, there is always a possibility that certain parties would feel aggrieved. Provided the panel and the members, directors, etc., do not act in bad faith, section 20 will give them protection against being held liable for damages. Separately, the section makes provision that will enable the panel to indemnify any member, director, officer or employee of the panel in respect of their activities on behalf of the panel. Finally, the section provides for the inclusion in the Defamation Act, 1961, of a provision that would ensure than any report of the activities of the panel will benefit from qualified privilege as provided for under that Act.

As a result of the interest of the panel in matters that are happening in the corporate area, it is considered appropriate that the panel should be specifically identified as a party which has access to reports of investigations which are carried out under Part II of the Companies Act, 1990, or reports of relevant authorities of a recognised stock exchange under Part V of the Companies Act, 1990, concerning insider dealing. As mentioned, these reports could relate to areas in respect of which the panel would have a particular interest. The primary legislation already provides for the availability of those reports to other interested parties. With the establishment of an Irish Takeover Panel, it is considered appropriate that they equally should be specified as a party to whom access to the reports should be made available. Section 21 provides accordingly.

In a number of provisions, reference is made to prescribed matters. Prescribed means prescribed by the Minister by regulation. Section 22 deals with the manner in which such regulations are made. In certain instances it will be sufficient for the Minister to lay the regulations before the House. However, in three instances — those in section 1 where the Minister, within the definition of "control", proposes to alter the threshold at which mandatory offers must be made; section 2 (1) (c) where the Minister proposes to extend the companies to which the panel's remit applies; and section 7 (3), where the Minister proposes to change the scheduled principles — it is provided that the Minister's draft regulations must be approved by both Houses of the Oireachtas by way of a resolution. The other circumstances where the Minister would exercise his power to make regulations would involve the prescription of a recognised stock exchange.

Section 23 is a reasonably standard provision included in legislation where reference is made to a particular body and it simply provides that any document sealed with the seal of the panel will be accepted by a court in evidence unless proof to the contrary is shown. One of the central features of the activities of the Irish Takeover Panel will be the issuing of notices, directions and other rulings to parties involved in a takeover.

Section 24 makes provision as to the manner in which the information is to be conveyed. It also provides that in the case of a company registered under the Companies Acts, the registered office will be the residence of the company. Two sections of the Bill, section 11 (5) and section 17 (3), provide for an offence. Section 25 provides for penalties in respect of persons found guilty of an offence under those sections. It also provides that in the case of offences under section 11 (5) and section 17 (3) the proceedings may be prosecuted by the panel. In addition, the time limit within which proceedings can be brought is two years.

Section 26 is also a standard provision that ensures that any expenses incurred by the Minister in the administration of the Bill will be met out of general funds. As mentioned in relation to section 16, it is not proposed that the Minister or Central Government funds will be involved in providing any funding to the activities of the Irish Takeover Panel. Section 27 contains the short title as well as the manner in which the Bill can be commenced.

The Schedule to the Bill contains the principles which will be applicable to the conduct of takeovers. Essentially, the principles are a general expression of the matters that will govern the activities and rules of the panel in ensuring that all takeovers are operated in a fair and reasonable manner.

That concludes my outline of the Bill. I commend the Bill to the House and I look forward to hearing the contributions of Members.

Cuirim fáilte roimh an Aire Stáit agus roimh an Bhille. This Bill replaces legislation that is almost 200 years old. That legislation stood the test of time.

I wonder why we had to make the Irish Takeover Panel a statutory body. The Minister of State said that because of the stature of the London market, parties involved in takeovers there would generally respect its directions or rulings. That is an indictment of Irish business people and they are not deserving of it. There has been too much castigation and ridicule of business people. They are the employers who keep the wheels of industry and our country moving. After all, if they have acted without a statutory body for almost 200 years there is no reason to create a statutory body now. However, the Minister of State and his advisers might have good reason to think otherwise and I do not dispute that. Nevertheless, it is a pity.

Section 6 refers to the composition of the panel and names the Law Society of Ireland, the Irish Association of Investment Managers, the Irish Bankers Federation and the Irish Stock Exchange as nominating bodies. The panel will also include the Governor of the Central Bank. When takeovers occur it is important to protect these groups and the shareholders. However, another group of people who often are not protected are the workers, and there is nothing in this Bill to protect them. They emerge badly from many mergers and takeovers, particularly workers who are starting their careers and have been less than five years with a company. When the company is taken over they are simply thrown out. That is sad and there is nothing in this Bill to protect them. There should be such a provision.

When one speaks of mergers and takeovers one must bear in mind everything that is taken over. That includes workers and their products. Often mergers occur because there is a duplication of products and, in order to sew up the market, fewer workers are required to do the job. "Restructuring" is the modern term for that practice. In every restructuring human beings are disposable fodder. This Bill should provide protection for workers. Perhaps it is not in the remit of the Bill but if possible I would like to see such protection included. It is an important issue. Every person who loses a job represents a family out of work, because it is often the breadwinner who is let go and put on the live register. A survery of the long-term unemployed would probably show that many of them became unemployed as a result of restructuring and takeovers. Perhaps the Minister of State would look at the human aspect of takeovers. It is most important.

We appear to be giving a great deal of power to the Central Bank in this legislation. Ministers and Governments have had on a number of occasions to put extraordinary pressure on the Central Bank to lower interest rates when that institution was keeping rates higher than they should have been. In this Bill we are giving the Central Bank even more power. The Governor of the Central Bank will nominate the chairman and vice-chairman. The workings of the panel will be controlled by "big daddy" in the Central Bank. Is that wise? We have had experience of the Central Bank keeping interest rates high and working for its own best interest. The chairman and vice-chairman should be appointed by a vote of the people who are nominated to the panel. Workers should also be able to nominate a member of that body because, without them, there is nothing. The chairman of the panel should be democratically elected from the body and not appointed by the Central Bank because we are giving too much power to the Central Bank in its dealings with business.

The Minister stated:

As a protection for parties subject to the sanction imposed by the panel, such parties will be empowered to apply to the court, and the court, following a hearing on the matter, can either confirm the decision of the panel or annul the decision and make certain orders.

I wonder if we are giving too much power to the courts because we are leaving it up to one man to make a decision which must be accepted. There was a time when An Bord Pleanála made decisions regarding planning but people are now challenging those decisions in the High Court and the Supreme Court. Such challenges cost my county £1.5 million — the county won in three cases but lost in the fourth. One wonders whether judges are experts in these matters. If we set up a panel then its decisions should be sacrosanct.

I once attended a planning meeting at which three legal advisers were present. Their advice was that although the proposed planning was within the law so many objections could be raised leading to such a prolonged legal process, that it would make it uneconomic for the developer to continue with the work. This is what happens when we give too much power to the courts. When the Minister sets up this panel it should be given sufficient power so that its decisions will be beyond legal challenge. In the words of John Wilson it should not become "a barrister-fattening exercise" and we are not bad at that in this country. There needs to be some controls because the companies being taken over, and their shareholders, will have to pay the costs. When a case goes into the legal machine it can take many unexpected turns.

This Bill is necessary and I welcome it. However, I regret that we will have yet another inspectorate because we are overrun with inspectors. We had a great country in the 1960s when there were far less regulations, statutory instruments, legal jargon and interference. I wish the Bill well and I know that the Minister has received the best advice but, from a layman's point of view, I would appeal to him to put the powers of the panel beyond the courts. If someone is determined enough and has sufficient money, they can make it uneconomic for a takeover to go ahead.

I would also like to see workers involved as they are inconvenienced the most by takeovers. When companies close, workers' lives are changed and the same can happen when there is a takeover.

We also need to introduce legislation to deal with people such as Tony Taylor. In such cases, innocent people think they are getting a very good deal but they lose their life savings. We seem to have no control over financial concerns which advertise very attractive interest rates in off-shore accounts, advising people on how to evade if not avoid tax and so on. At a time when so many people are receiving redundancy lump sums it is important that they do not lose that money to smooth talking whiz kids and their bad investments.

I welcome the Minister for whom I have great respect. While I am not too familiar with the details of the Bill, on my initial reading of it I wondered how necessary it is. I was disappointed to think that the financial institutions had neither sufficient ability or confidence to manage their affairs without the need for legislation to give effect to their decisions. That is a poor reflection on these institutions and I am disappointed that such a supposedly competent group should have to run to the Minister to introduce this legislation.

The Minister said that the working group was established to oversee the separation of the Irish and London Stock Exchanges. He said that it was the majority view that there may not be the same respect for the rules and rulings given as compared with the London panel. I agree with Senator Farrell that it is disappointing that this mentality is emerging from those in positions of financial power. These gentlemen — there are very few women directly involved at senior level in these areas — had to run to the Minister and, as a result, we have a Bill before us. I believe that most sections of this Bill should be, and could be, applied by a voluntary group set up to monitor and control takeovers.

We have a great deal of legislation, much of it gathering dust on the shelves. We have companies' legislation, amendments to various companies Acts, we have monopolies and takeover legislation and all the existing legislation combined, together with a voluntary body, could keep the situation under control. I would be interested to hear the Minister elaborate further on what is the real necessity for this Bill. Reading through it, one has to ask why it is not possible to let them get on with the job, taking responsibility and control for themselves.

Here we have the mentality of State dependency creeping into the higher financial echelons, which is a poor reflection on them. I welcome the appointment of the chairperson designate, a Clare man, Mr. Dan O'Keeffe SC. He might apply a little common sense and normality. I congratulate him on his appointment.

The other feature of the Bill which interests me is the Minister's power to interfere, change, amend or prevent anything on this panel. The level of ministerial involvement, or possible involvement, is extraordinary and I question the necessity of this. The bottom line is that if London can do it, so should we. It is time we matured and took responsibility for ourselves. The panel will, I gather, be self-financing and I would like the Minister to elaborate on how it will secure that finance. Will it be securing fees from various takeover activities? I am delighted an annual report will be presented to the Houses of the Oireachtas and I hope it will be laid before the Houses of the Oireachtas for consideration within at least six months of the previous year.

I am very curious about section 6 of the Bill and the membership of the panel which is drawn from the Consultative Committee of the Accountancy Bodies — Ireland, the Law Society of Ireland, the Irish Association of Investment Managers, the Irish Bankers' Federation and the Irish Stock Exchange. We are told that the membership of the panel is representative of the various interests in the Irish financial markets. This is a gross misstatement. These are bodies that are, in the main, administrative, bodies which provide services to shareholders and who actually do a job at the behest of shareholders. In a sense, they have their own cliquish, vested, concentrated interest. The ordinary shareholder, be they from Longford, Leitrim or Roscommon is not represented. A person such as Senator Quinn who creates movement on the ground as far as employment and financial turnover are concerned, is not really representative. Where is the ordinary shareholder who knows about basic, normal business activity on a daily or annual basis and who is not involved in these very selective, administrative groups? There is a real need to have somebody who does not come from specific areas of expertise on this panel. The ordinary man or woman is not represented. This is a very exclusive representation.

Financing this country is not exclusively the domain of these bodies. The realities are that finance is out there and people are working hard, taking chances and making investments. These are the people who really know how things happen and are in a position to get involved in takeovers, etc. Let us give them a voice on this panel. I hope that on Committee Stage, the Minister will give that serious consideration. He may ask how it is possible to choose an ordinary shareholder but knowing Minister Rabbitte's ability, I am sure he will be able to devise ways and means through which an ordinary businessperson or shareholder can become a representative on this panel.

As I stated initially, the Minister seems to have extraordinary powers under this Bill. There is an unacceptable level of ministerial involvement in something which, in my view, should be privately controlled. The reality is that existing legislation could be applied by the Minister under his portfolio for consumer affairs with particular responsibility for the application of company law and restrictions in relation to competition. Given that this Bill is coming from Minister Rabbitte, for whom I have great respect, I can only suppose there is good reason for it and that there must be a clear thought process behind it. I cannot see that myself and I fail to understand it, but I hope the Minister will be in a position to elaborate in more detail at the conclusion of this debate.

The Bill is primarily concerned with technicalities and controls, with the admonition and censure of people. We already have legislation for this which may be difficult to apply because, as we have seen repeatedly, you can legislate as much as you like but there are always ways of getting around the legislation. While I am sure the Bill is necessary, I have reservations about it. It is a poor reflection on our financial institutions that they had to run to the Minister to get a Bill to control their own affairs.

I welcome this Bill and I will support its passage through the House. I thank the Minister for his explanation.

I had an experience 18 months ago which had a great impact on me. I was in America and I was in the company of senior business executive investors. One of the gentlemen, on hearing I was from Ireland, spoke very enthusiastically and highly about a holiday he had here and about what a wonderful country it was. As I glowed in the praise, he then turned to the other investors and said that he was on the board of a number of companies and that he had made it a definite policy never to allow any company of which he was a board member to invest in Irish business again. I was jolted and I reacted immediately. He told me that he had been involved in a business in Ireland which, after a number of successful years, he and his colleagues felt obliged to close down. He said that the laws, the traditions and the outlook of Ireland to anybody who had to close a factory down after a number of years was so intrusive, and made it so difficult, that he decided he was not going to allow any company with which he was involved to invest here again. He was not talking merely about the laws but about the nation as a whole, the trade unions, the senior civil servants, State agencies and we as citizens. To a certain extent, whenever I look at a Bill coming through now, I try to keep a watching brief on behalf of those whom we do not ever want to deter from investing in Ireland.

I wish to make three points about the Bill. First is the issue of whether our takeover panel should be voluntary, something Senator Farrell and Senator Taylor-Quinn have spoken about. Should it be voluntary, as in Britain, or statutory as in the rest of the European Union and as proposed in the Bill? As a general rule, I favour the voluntary route. In many business activities, the most efficient and cost effective form of regulation is self-regulation. I am not happy about the general trend in the European Union towards regulation by directive rather than by voluntary means. In many cases, this produces a cumbersome mechanism which is not nearly as effective, and is much more expensive than a voluntary form of regulation.

However, I agree with the Minister in this case. Voluntary regulation is not appropriate in all cases. I believe in a pragmatic approach where each case is examined to find what is most appropriate to it. That should determine what is put in place rather than any prejudices or ideology. This Bill is a case in point. Even as a believer in voluntary regulation, I am persuaded by the Minister's case that the statutory route is the proper one in this case.

There are two reasons for that. The first has to do with reasons of clout and Senator Taylor-Quinn and Senator Farrell spoke about this. It is not a coincidence that the arrangement in London is voluntary because the city is such a tightly knit fraternity that a voluntary body can grow its own teeth. The takeover panel in London has real power because it can effectively stop people doing business where, and if, they transgress. However, no voluntary body could have that clout. Companies or individual operators could flout its recommendations with impunity if there were no teeth to ensure compliance with them.

The second reason the statutory route is right is more important and concerns the issue of international credibility. When all is said and done, London is a tiny market in financial terms. From the outside, it looks small, cosy and eminently capable of being manipulated by cowboys acting inside the fence. I do not bet but I am told that many British punters will not bet on Irish races because they feel they are on the outside of a market which is tightly controlled by relatively few people. I am sure that is not true but the perception is there. I asked why, when race meetings are announced, Irish ones are seldom included except for the big ones and that was the reason given. We must face that in the context of the Stock Exchange where we are trying to interest people from outside in our local stock market. Credibility is the key issue and, when it comes to takeovers, only a statutory takeover panel can deliver the necessary credibility to outside investors. Even with that, it will still be an uphill battle. I applaud the thinking behind this Bill. The issue of how we appear to the outside world has been very much in the minds of those who drew up this Bill. That is good and I wish the same approach was applied in the case of our food industry, a matter I will address later on the Adjournment. It does not apply to all legislation.

I am concerned about the cost of the mechanism we are creating. It will not involve any cost to the Exchequer, but that is not the only consideration. I have noticed that the Department of Finance tends to have a schizophrenic approach to costs. If the Exchequer is involved, all its scrooge instincts emerge and that is no bad thing because we are talking about our money. However, so long as the State does not pay for it, the Department seems to have no problem loading enormous costs onto other people, regardless of their ability to pay. There is a vagueness in this Bill about how exactly the cost of the operation will be levied. I would welcome clarification on this from the Minister but perhaps that may not be easy to do at this stage. Maintaining a quotation on the Stock Exchange is an expensive operation, especially for small or medium-sized companies. We must be careful not to thoughtlessly add to the burden without giving the matter full and careful attention. I feel strongly about this because we tend in many cases to adopt the attitude that if we are not paying for it ourselves, it does not matter how we load the costs onto someone else.

The Bill as presented to us imposes a time limit on the presentation and publication of the takeover panel's annual report. I applaud that as the person who, in the four years I have been a Member of this House, has been pushing for this in regard to all State bodies. However, I was a little concerned to see that this provision had to be added on Committee Stage in the Dáil. Could we not send a signal to the parliamentary draughtsman that, from here on, whenever an annual report is mentioned or the word appears there must be, as a matter of routine, a time limit on its presentation? The principle, I am glad to say, has now been fully accepted but we should not have to repeatedly fight for it. For the first few years, I tabled an amendment on this to every Bill which came to this House and I am delighted to see that it has been recently included in Bills. It happened on this occasion in the Dáil so we cannot take credit for it this time.

I now move to a broader issue. In the discussion on this Bill before it reached this House, much was made about the small size of the Dublin stock market and the desirability of increasing that size in the interests of improving the credibility of Dublin as a financial marketplace. From the point of view of our economy, there are two main benefits which a stock market can deliver. The first is that we can provide a mechanism by which some companies can raise capital, either for start up or expansion. The second is that a stock market can provide an opportunity for investors to put money to work in the Irish economy rather than investing abroad. This is a major need in view of the enormous size of the pension funds which operate in this country. The future of everyone who works, with the exception of civil servants, depends crucially on stock exchange investments. The vast majority of our pension funds depend on stock exchange investments. If the money cannot be properly invested in this country it goes abroad. On the one hand, plenty of companies are looking for capital and plenty of investment funds are looking for a place to invest their money and, on the other hand, we have only a tiny stock market.

There are two reasons this is so. First, there is an artificial constraint on State-owned companies raising money in the most appropriate place. I have no ideological commitment to privatisation and see no essential benefits in itper se. For me, two things are paramount and neither is necessarily linked with ownership. One is whether the company is operating in a competitive market rather than in a monopoly. I have found my membership of the Oireachtas Joint Committee on Commercial State-sponsored Bodies of huge interest in recent years as the enormous benefit of competition has been discovered. Even in State companies, competition is beneficial to the customer, the nation and the company itself because it makes it work harder.

The second reason is whether the company can get the new capital its business requires. A number of successful State companies have, by the nature of their business, a continuing need to consume large amounts of new capital. The State is no longer in the position, if it ever was, to provide that sort of money and the reality is that there are many investors who are only too willing to put that new capital into those companies— Telecom Éireann, Aer Rianta, Aer Lingus and perhaps even the ESB. However, what is holding up this process is the dog in the manger attitude of some people who believe we must hang on to total State ownership under any circumstances. They acknowledge that the State is not prepared to invest properly in the business, yet they will not let other people do it.

The recent alliance announced by Telecom Éireann is a halfway house which undersells the real potential of that company. Aer Rianta, which is a good example, has major opportunities abroad and it is not the State's business to get involved in funding them. Why should it? Aer Lingus, like all airlines, is going to need a constant flow of new capital in the future. The ESB, similarly, has massive future investment needs which could be funded commercially. The companies I am talking about are industrial giants and their presence on the Irish Stock Exchange would transform it overnight.

Holding back those State companies from the Irish Stock Exchange is one reason for its stunted growth. The other is that private companies often find that going public is a proposition which is not very attractive, and I can talk about that with some knowledge. There are many reasons that a company might choose to remain private, but let me focus on just two issues. First, private companies, especially if they are family-owned, tend to take a long-term view. They want to stay in business for the long haul and, as a result, they often consider doing things which will not pay off for a very long time.

In contrast to the story I told earlier, I was impressed recently by the visit to my company of representatives of an American company. We spent a day with them and it was very interesting. Where our people were interested in what the customer wanted and long-term interests, this company, which does not have any investments here, was clearly more interested in the short term, day-to-day stock market quotation and they were not taking a long-term view. They even made a number of telephone calls during the day to inquire about their stock market quotation.

A private company has the freedom to forego profit in the short term because it considers that enhances its long-term future. Assuming that the company can pay its way, there is no overriding pressure to maximise profits week in, week out. It need not look for this week's gain. When such a company thinks about going public in Ireland, Britain or, more so, in America, it gets a very rude shock. The first thing it must do is throw the long-term out the window because its new investors from the stock markets will want to know the short-term results. In the US they want to know the quarterly results. All they are interested in there is in the current quarterly results and there is now demand for the monthly results of many companies. They are only interested in the long-term to the extent that it does not compromise today's earnings and the reality is that investing for the long-term always compromises today's earnings.

I am trying to explain why some companies which would join the stock market are tempted not to do so because it forces them to take a short term rather than long-term view, and the long-term view must be in the best interest of those people to whom Senator Farrell referred, the workers in the organisation, as well as the investors and customers.

That brings me to the customer. The second shock private companies get is that all of a sudden their customers become less important. Private companies survive and thrive by serving their customers' needs. Suddenly, overnight, they are told when they go public that customers must take second place to the shareholders' interests, who are usually big investors, pension funds and others. This, of course, is very bad business indeed. In the long-term, what is in the customers' interest is also in the shareholders' interest; but that is in the long-term and in a market dominated by short term considerations, their interests tend to diverge. Small wonder that many private companies which do not have a pressing need to raise large amounts of capital prefer to stay away from the stock market, but it does not have to be that way. Stock markets are not necessarily short term in their focus; it just happens to be the culture of which the stock exchanges in Ireland, Britain and America are a part. In the Far East, and particularly in Japan, a totally different culture exists. On a visit to Japan a couple of years ago I was most impressed by the long-term view of Japanese companies in regard to investments, looking after their workers and such things as redundancies, which they avoided at almost any cost.

What I am saying is this. If we want the Irish Stock Exchange to grow — and it is in the interest of the economy that it does — then things must change, and the Minister will be delighted to know that I am not asking the Government to change something as I am not saying that this is in the hands of the Government. First, we, as a nation, need to change our attitude to public investment in State companies. That is, to a large extent, in the hands of the Government. This need not necessarily involve total privatisation; but it does involve creating a market in the shares of successful State companies, some of which I have just discussed.

Second, investing funds need to change their attitude to the long-term. They need to recognise that what is in the interest of a company's customers is ultimately also in the best interest of the company's shareholders. That shift in culture would be considerable, but I choose to believe it is not impossible because I have seen it happen elsewhere. After all, most big investors in business are in for the long-term too. They are in the business of providing pensions well into the future, 30, 40 or 50 years hence in many cases. If we can persuade them to take the long-term view, we could greatly stimulate the economy through the medium of stock exchange investment. I welcome this Bill because I think it is taking steps in that direction and I use this opportunity to try to remind not just the Minister and the Government but the nation that we can take other steps also.

Senator Quinn mentioned words like confidence and trust in the course of his contribution. This Bill is designed with that in mind and I welcome it. When we are dealing with people's shares and money we must be very careful. We know what has happened in the past when some "cowboys" managed to get their hands on these things and left people in difficulty.

I welcome the way the Minister addressed the House at length, using quite a lot of technical language which many people would not understand, but that is necessary in a situation where one is dealing with such complex matters. The idea behind the Bill is to protect the shareholders in situations where takeovers or other relevant transactions, such as the substantial acquisition of securities, are contemplated and/or put into effect and to provide support and credibility for the Irish financial markets following the separation of the Irish Stock Exchange from London. Following the Stock Exchange Act, 1995, which was promoted by the Minister for Finance, the Irish Stock Exchange, Dublin, which at the time formed part of the one in London, stands alone. Since then, and until this Bill is enacted, the take-over code and rules of the Takeover Panel, London, continue to apply. It is as if the exchange was in Dublin but part of it still in London, so it is important that this Bill be enacted.

I want to make a few further points about the Bill and one of them relates to section 22. I am glad to see that regulations will not be rushed through by the Minister and put into effect and that they must be referred back to the Houses of the Oireachtas. I welcome that because the matter can be discussed openly.

I have just one query for the Minister. Section 8(5) requires the panel to submit its proposals and rules dealing with substantial acquisitions and in concert parties to the Minister for Enterprise and Employment for prior approval. Will the Minister of State clarify whether subsequent amendments to the initial rules on these topic would require prior ministerial approval?

The Bill is necessary, although much of its contents is above our heads. I was glad to hear the comments made by Members, especially Senator Quinn, who is involved in business and the Stock Exchange. We need the trust and confidence of the people so that they and foreigners will be encouraged to invest in Irish companies and in the Irish market. Our Stock Exchange and panel must be strictly dealt with by legislation because we are dealing with money, securities and savings. I welcome the Bill.

I thank Members who contributed to the debate. I would like to clear up a misunderstanding in relation to the scope of the legislation. The purpose of the Bill is not to adjudicate on the merits or demerits or the financial or commercial advantages of the particular takeover. It does not pass any judgment on that. Some Members may have felt it has a role in that regard, but it is purely to protect and ensure that principles of equity and fairness are applied to the interests of shareholders. It does not deal with the question of advantages or disadvantages.

Senator Farrell began by querying whether it was necessary to establish the takeover panel on a statutory basis and a number of other Members, including Senator Taylor-Quinn, asked if it was necessary at all. The short answer is that it is necessary because of the separation of the Dublin Stock Exchange and the London Stock Exchange. Senator Quinn touched on the fact that the status of the City of London as a financial centre is such because its credibility has been established over hundreds of years. Members may have views on Britain's place in the world in 1997 compared to 1947 or 1927, but that does not necessarily apply to the City of London.

As Senator Quinn pointed out, rulings or directions of the panel in the City of London carry clout and the cost of disobeying or circumventing them would be such that it would not be one which any reputable financial interest would be prepared to pay. By comparison, the Irish Stock market is small and does not have anything like the critical mass of the City of London and would not automatically have its credibility. If parties sought to circumvent, ignore or abuse rulings or directions of the panel, a different situation would obtain. I assure Senator Farrell that it was not the intention of the Bill to reflect on the competence of Irish business or businessmen to arrange their affairs. It is merely a fact of history, size and financial reputation to say that it would not be an analogous situation with that of London. As Senator Quinn said, we seek credibility — the reason for putting this on a statutory basis.

These conclusions respond to the demands of the industry. The industry carefully considered these questions. I agree with Senators who said there are merits in a voluntary mechanism. However, it is generally felt it is necessary to put this on a statutory basis for the reasons I outlined. We should not create an image of a takeover panel permanently in session. Having spoken about the importance of a panel, it is not envisaged that it would be preoccupied with constant takeovers because that situation does not obtain in Ireland; but on the occasions it does, I agree it would be important.

As regards Senator Quinn's concerns about costs — albeit in this case they would not be imposed on the Exchequer but on the companies or transactions concerned — the way levies and charges will be made is probably unfounded or exaggerated in that the cost of the panel would be minimal. We are talking about a stipend or honorarium for the directors, which will be of no great consequence, and perhaps a secretary general and a secretary. Transactions will look after themselves. It is not intended to levy charges other than in direct proportion to need. Arguably, there might be a particular year in which there is a fair amount of activity, but in another year, such a situation might not arise. I do not believe this will be too much of an imposition.

I do not want to be dragged down the road Senator Farrell wished to bring me in relation to the Tony Taylors of this world. Other legislation applies to that, although one could reasonably say it did not work in the case he instanced. There is the Investment Intermediaries Act passed by the House of the Oireachtas in 1995 and subsequently invoked. If somebody is determined to subvert an Act there is not much one can do about it. We should not mislead people into believing that it is possible to legislate to the nth degree so that somebody determined to circumvent the law will not find a way to do so. We can legislate to prudentially supervise the activities of such people and require them to conform to certain standards but beyond that it is difficult.

Senator Farrell was concerned with the power being given to the Central Bank. I do not believe that is entirely fair in that the only power being given to it is the appointment of the chairman or deputy chairman of the panel. Omitting the question of whether he is from County Clare and whether that is a good thing, it is not an extensive power. It is desirable that one goes outside the family of interests to which Senator Taylor-Quinn referred and which is, admittedly, a fairly exclusive club. It is probably a good idea to appoint an outside person rather than nominating a chairman themselves.

I accept Senator Farrell's point about the possible impact of takeovers on workers in the company. However, notwithstanding the complexity of this Bill, I point to its relatively narrow scope. There is legislation to deal with the protection of workers' interests in that situation; Senator Quinn might say there is too much legislation dealing with it. There are also European instruments, such as the transfer of undertakings and so on, which provide for that area. One of the effects of a take-over may be downsizing — to use modern jargon—or restructuring. However, there is legislation to deal with that.

Senator Quinn mentioned how American businessmen praise Ireland and what it has to offer, but then he pointed to his own reluctance to invest here because of the plethora of law surrounding a closure or this country's traditions. That view has been represented to me. Sometimes I wonder if that view has not as much to do with the brouhaha created in this relatively small society when there is a major closure as it has with the perception that we have excessive law. The business of disemploying workers in Japan, for example, is not permitted by its culture — I do not know about its law. It is inescapably more difficult in the Netherlands or the Scandinavian countries than it is here, although I know that does not compare with the United States.

I agree with Senator Farrell that the protection of workers is also a valuable consideration. Last night I dealt with the type of case to which Senator Quinn referred when I received a deputation from Deputy Bell and his trade union colleagues relating to Coca Cola. It is not a closure but a serious downsizing by a major international player. Perhaps Senator Quinn knows where it ranks in the world, but I think it is near the top. It employs 335 people in Drogheda and they have well paid secure jobs. However, it now proposes to make 108 people redundant. This, in addition to other problems which have arisen in Drogheda, is a serious blow to the town. It may be conceded by people involved that the company sees itself as having been obstructed by a section of the workforce from doing certain things which it believes are necessary. If these redundancies go ahead, it will be a huge blow to the economy of this small town. A company which has done well in Ireland and made considerable profits from a good workforce has an obligation to the town.

It is good that we have, both by tradition and law, an ability to intervene with a major player to sort out the arguments as to why it should, as I hope it will, change its mind. Without that tradition, it would be difficult to do that. That is not to say we should not exert influence on the industrial relations situation there as well, but the loss of 108 jobs is a big price to pay.

As regards Senator Quinn's point about it being voluntary, he drew his own conclusions as to why this is underpinned by statute and why that is desirable. As regards section 8(5), Senator Calnan asked if subsequent amendments will require prior ministerial approval. The answer is yes. One Senator asked if too much power is vested in the Minister and if the Minister's role is too intrusive in this situation. I do not think that is the case. The Bill states that it is only if the ground rules are changed that the Minister must be brought in. That is only consistent with where we started out from. The Minister will not use the powers of the Bill to intrude into the affairs of the panel and how it does its business. However, it may find that after a year or two of its operation, it may want to make changes. It would then be proper to revert to the Minister.

Senator Quinn gave an interesting dissertation on the role of the stock market in Ireland. While it is not strictly the purpose of this Bill, he is right to air his views. He used this opportunity to comment on the role the Irish Stock Exchange might play in other circumstances if it was not constrained by size and our cultural attitude to whether some of the major State companies should be quoted. The arguments he set out about the Stock Exchange being the mechanism to raise capital for the expansion of companies in this economy are incontrovertible. I accept that no one would make the argument that the Stock Exchange is contributing as much as it might. I also accept that it can be a mechanism for investment in the domestic indigenous economy, rather than placing moneys outside the jurisdiction because of a lack of opportunity in many cases. I was interested to hear his view that our traditional culture has obstructed the growth of the Stock Exchange and that once a company is a significant player on the Stock Exchange, it is only interested in long term planning as long as it does not sacrifice short term dividends. That is probably true. There is evidence that there is now a more pragmatic assessment of these questions than in the past.

The Senator also referred to Telecom Éireann's strategic alliance which, most people agree, is a step in the right direction. More than that, however, it is a necessary step if Telecom is to compete in the global market. In my personal opinion — I am not speaking on behalf of the Government — I would draw á distinction between this matter as it relates to a food or insurance company and an energy company such as the ESB. If one considers the experience in Britain, there is a significant issue of public policy to be considered in terms of privatising strategic utilities, particularly where the public good could arguably suffer. For example, the process to privatise water in Britain was not very satisfactory. If the general experience during the past 15 years in Britain is considered, senior executives and management used the privatisation process for self aggrandisement rather than strategic considerations and it has not been a happy experiment. Ireland has taken a slower approach but there is some merit in doing so.

I am considering a small number of amendments to the Bill which do not alter the scope of the measure but are seen as necessary to give effect to its provisions. The first is an expansion to the definition of the terms "offerer" and "offeree" to ensure that the provisions of the Bill relating to the regulation of these parties, at certain stages prior to the making of an offer, can have proper effect. The present layout of the text at section 16(1)(d) leads to a certain confusion that it may relate to rules which it does not. The section is concerned with the powers of the panel to raise charges to finance itself. A simple revision to the format of the text is seen as resolving this problem. I am also considering a revision to section 20 which provides for the indemnification by the panel of its officers, directors, etc., to remove the doubts expressed by panel in respect of the provision of this indemnification in a certain specific situation.

I merely wanted to bring these revisions to the attention of the House. In normal circumstances I would be glad to avail of any disposition on the part of the House to allow me to conclude the Bill today because it must be dealt with as quickly as possible. However, until the precise text of the amendments becomes available, I cannot proceed further.

Question put and agreed to.
Committee Stage ordered for Wednesday, 12 February 1997.
Sitting suspended at 3.45 p.m. and resumed at 4 p.m.