I move amendment No. 65 :—
In subsection (5), page 107, to delete lines 11 and 12 and substitute : " 2 years or to a fine not exceeding £500 or to both or on summary conviction to imprisonment for a term not exceeding 6 months or to a fine not exceeding £100 or to both " .
This section goes so far as to say " be concerned or take part in the management of any company ". That seems to me to be wide enough—to impose the penalty—if the Attorney General so wishes—the penalty of unemployment of a commercial person. It seems to me to go far enough to exclude being a member. Supposing a manager or a managing director of a company goes bankrupt, or is concerned in bankruptcy, that is fair enough. I think it is perfectly proper that he should not be a director. Neither should he be a manager, a general manager or head of a department concerned in the management. But, surely it is going a little bit too far to say he could not seek commercial employment in a company. Is it not straining it a little bit too far to say he cannot be concerned, directly or indirectly, in the management of any company ?
The person must be convicted on indictment of any offence in connection with the promotion, formation or management of a company.
Let us look at it this way apart from this Bill. Let us look at it broadly as legislators. Is it quite in accord with the criminal court or proper criminal steps that we are going to put this kind of a chain on a man ? I agree with the Minister he is bad news. I would go the whole way with the Minister in the case of a manager and particularly a general manager of a company. But, I do not agree that the man should be precluded from any employment. Take the solicitor who is struck off the roll, I understand he can be employed as a clerk in a legal firm. I think that is so but I am not sure. If a solicitor is struck off the roll and can be employed as a clerk in a firm of solicitors, bad and all as his conviction and the seriousness of the crime is, which will undoubtedly entail for him a serious fine and imprisonment, why cannot a man who has been employed in a company and who has paid the penalty of his crime, not be employed as a watchman or a clerk in a company ?
He is not precluded from being a clerk.
He cannot be concerned with management. The desirability of barring a general manager is necessary. I would go the whole way with the Minister on managerial responsibilities. This Act goes so far as to say that the poor man cannot be employed at all.
It does not go as far as that. It only authorises the court, as it sees fit. It is not mandatory on the court. It does not necessarily preclude employment.
I still think that going as far as it does it goes too far. I think this is mostly a drafting point. I do not think the Minister intends to go to the extent outlined but I feel that what I have suggested might be within the context.
The Company Law Reform Committee were specific on this. They referred on a number of occasions in their report to damage being done to the commercial reputation of this country by the failure of a number of companies. In paragraph 140 they went on to say :
The most effective remedy to protect the public and those dealing with companies from this type of conduct is to give the Courts power to debar a person from acting as a director or from being concerned in, or taking part in, the management of any company for a lengthy period.
I completely agree.
First of all, as the Chairman pointed out, the court will be the body that will make an order to this effect. It can limit the period of operation of this order and I take it that it is this particular order which would state what management functions this particular gentleman would be debarred from holding.
If I go out and rob a bank, am convicted and serve a sentence there is nothing to stop me forming a company. Would it not be very desirable to extend this principle to cover a far wider range of offences than this list ?
If a person is convicted on indictment for doing grievous bodily harm that may not be a reason for disqualifying him from the management of a company.
I think we should ensure that a director of a company is a person of the highest integrity having regard to the very great responsibility of limited liability.
The Jenkins Committee recommended that the British law should cover offences beyond what we are providing for here. We could perhaps go a bit further than the Bill as at present drafted but not quite as far as the Jenkins Committee suggests.
How far did they go ?
They referred to any person (a) who has been convicted of any offence involving fraud or dishonesty, whether in connection with a company or not, (b) who has been persistently in default of the Companies Act and (c) who has been shown to have acted recklessly or incompetently in relation to the affairs of any company of which he is or has been a director.
Let me quote again : " the person who has been convicted of any offence involving fraud or dishonesty whether in connection with a company or not." We could, perhaps, consider incorporating that in the section, if the Deputy felt strongly about it.
For a very modest expenditure a person can form a company and set himself up as a director. There is this very considerable privilege of limited liability. Would the Minister take another look at it.
Yes, I will look at that again.
Is it possible for the liquidator himself to make application in court or must he be legally represented ?
I think the position is that if it is a compulsory liquidation, and the liquidator has been appointed by the court, he can go to court himself. But if he is a liquidator in a voluntary liquidation I presume that he would not have power to go to court unless he was specifically authorised under the provisions of this Bill. I think the court will provide for that.
Does this section mean that anybody who finds himself in the position indicated in the section, and wants to take a job in a company will have to apply to the court if an order is made against him ?
Not as a clerk.
He is concerned or taking part in the management. As I see the section, it appears to me that, a person is convicted and then the Attorney General may apply to have him put into this category and he is put into this category. He serves his sentence on the indictment and when he comes out there is a stop order against him. He has to apply to the court if he wishes relief from it. It seems to me that if he is going to take up that type of employment he will have to apply to the court.
I do not know that it is very onerous on him that he must apply to the court. It is a good precaution to take so far as protection of the public is concerned. I think we ought to see that our legislation in this case is such as to ensure, as far as we, the legislators, can, that commercial affairs here will be properly conducted.
