Dáil Éireann Debate, Tuesday - 15 June 2004
183 Mr. R. Bruton asked the Minister for Finance the circumstances in which an account holder in a building society is entitled to receive an offer of shares when the building society is proposing to demutualise; and the basis on which some account holders can be excluded from such arrangements. [17466/04]
View answerLegislation relating to the demutualisation of building societies is a matter for the Minister for the Environment and Local Government and in this regard I have no statutory function.
A building society proposing to convert itself into a company must comply with the requirements of Part XI of the Building Societies Act 1989 and its own rules. The Act requires, inter alia, that the members of the society who are entitled to vote on a conversion resolution approve a conversion scheme.
Section 101 of the Act requires the conversion scheme to deal with a range of issues, including the rights of members of the society to be given shares in the proposed company and to subscribe for additional shares, and to specify the basis of any cash payments to be paid out of society funds in consideration of the conversion. Section 101 also provides that the terms of a conversion scheme shall restrict any rights conferred on members of the society entitling them to shares in the successor company, to acquire shares in the successor company in priority to other subscribers or to any distribution of the funds of the society. Such rights are restricted, in the case of those persons who become members of the society after 21 December 1988, to those members who held shares in the society throughout the period of two years, which expired with the day on which notice is given to members of the conversion resolution.
That section also provides that a conversion scheme must be approved by IFSRA as meeting the requirements of the Act.
