Special Committee Companies Bill, 1962 debate -
Wednesday, 20 Nov 1963

SECTION 194.

Mr. Fitzpatrick

I move amendment No. 3 :

In subsection (3), page 114, line 35, after " director " to insert " and published in the next ensuing statutory report of the directors ".

The object of subsection (3) is to permit a director to notify the directors of a company that he is associated with a specified company or firm. If a director does that as the section stands at the moment, that notification would be deemed to be a sufficient declaration of interest in relation to any contract made with the specified company subsequent to that notice. You could have a case where there are a number of directors, each having an association with other companies, and it would be possible for each of those directors to facilitate the other by not raising any objection to his dealing with the companies in which they had an interest. The object of my amendment is to make it obligatory on the company or the board of directors to publish that general notification in the next ensuing directors' report so that shareholders of the company, who are the people interested in the dealings of the company, will have notice of the association of the director in question with the firm or company.

Mr. J. Lynch

I think the Senator's point is a good one and, obviously, there is value in having another look at these things. It is true that the declaration of interest as at present required must be to fellow directors only and it is possible that fellow directors may not have the interest of the shareholders sufficiently at heart. Obviously, the purpose of this declaration is to protect the members of the company. The effect of the Senator's amendment as proposed is that this would be a declaration to be published in the next ensuing statutory report of the directors. As such, it would be available not only to the shareholders but to the public at large, and the public at large might not have any interest in it. I take it that the purpose of the Senator's amendment is to protect the shareholders rather than the public at large. There is the further difficulty that it would be a once-for-all declaration. I suggest we could do it more effectively and procure the result the Senator requires in another form. The idea would be that the declaration should be contained in permanent form in a special book that shareholders would have access to it at any time, and it would be made available at the annual meeting. A once-for-all declaration could be lost in subsequent documents in the Registrar's office and, therefore, would be of no real value to the shareholders, whereas this permanent book would be available at all times and in ready form for any shareholder to inspect and would be available for inspection at the annual meeting. If the Senator would accept the terms of such an amendment in substitution for his, I have here an amendment drafted which could be put to the Committee.

Mr. Fitzpatrick

Do I understand that this special book would be ready for inspection in the company's office at any time ? I put down this amendment rather hurriedly for the purpose of opening a discussion on the principle involved and for the purpose of making my case. I think the Minister's proposal is an improvement on my amendment as drafted and it meets my point entirely, and I accept it.

Amendment, by leave, withdrawn.

Chairman

I am now putting the suggested Government amendment which reads as follows :—

" Before subsection (5) to insert a new subsection as follows:—

‘ (5) (a) A copy of every declaration made and notice given in pursuance of this section shall, within 3 days after the making or giving thereof, be entered in a book kept for this purpose. Such book shall be open for inspection without charge by any director, secretary, auditor or member of the company at the registered office of the company and shall be produced at every general meeting of the company, and at any meeting of the directors if any director so requests in sufficient time to enable the book to be available at the meeting.

(b) If a company fails to comply with this subsection the company and every officer of the company who is in default shall be liable to a fine not exceeding £100 and if any inspection or production required thereunder is refused, the court may by order compel an immediate inspection or production.'"

The only point about that is whether there is a means of cancellation. If a director ceases to have an interest in another company he should be entitled to record that also.

Mr. J. Lynch

Naturally the company would enter it if there was such a declaration.

Amendment agreed to.

Section 194, as amended, agreed to.