asked the Minister for Finance whether holders of 7½ per cent National Loan 1981/86 and 7½ per cent Development Stock 1988/93 are entitled to convert into 9¼ per cent National Loan 1989/94; and, if so, why notice thereof together with the relevant conversion form was not sent to each such holder thereof.
Ceisteanna—Questions. Oral Answers. - Conversion of Government Stocks.
54.
The answer to the first part of the question is in the affirmative.
Holders of the stocks mentioned were aware of their rights from the relevant prospectuses and it would not be in accordance with usual practice to send specific notice to individual holders.
Is the Minister not aware that on the approximately 12 occasions on which national loans could have been converted in every single case up to last year notice was sent to each individual holder?
The Deputy is confusing two separate things.
Has the Minister finished?
Yes.
Is the Minister aware that the only effect of the manner in which he neglected to send to individual holders notice of their conversion rights has been that the smallholder who would not know about these things is being penalised and that the large institutions who keep investment managers and similar people know fully their rights and will take advantage of them and that the action of the Minister in refraining or neglecting—whichever word you like to use—to send conversion forms to individual holders means that small-holders will be penalised? Is the Minister further aware that any company which has issued debentures or loan stocks with equity conversions always sends to each individual holder a notice before the last date of the conversion so as not to take a quick advantage of a holder and does the Minister not think that the least he might have done is not to take a quick advantage of small people in this way?
The Deputy is talking a great deal of nonsense. When he refers to previous practice of notifying holders about their rights, he is, of course, speaking about loans which were coming to termination and in regard to which there was a legal obligation on us to notify the holders of the position in regard to the redemption of these stocks. What we are dealing with here and what we were dealing with last year is a new type of right which we have given to holders of national loan and there is certainly no obligation whatever on us to notify the holders of this loan of this particular right. They are all made fully aware of it when they subscribe to the loan. In fact, it is the practice to send out the prospectus of the new loan to everybody who has subscribed to the loan in the past. So that everybody who subscribed to the last national loan got a prospectus of this national loan in which it was clearly stated that they had the right to convert into this loan.
Is the Minister not aware that what he has just stated amounts to this, that when the State want something they will issue the notice and when the State hope that they will not convert they will not issue any notice? Is that a fair way to treat people?
I have no interest in not having people convert into this new loan from last year's loan or the loan the year before that. In fact, in the interest of a particular fund in which I am interested in my official capacity I have indicated that they should be converted into the new loan. Every person who subscribed for last year's loan, as I say, got a prospectus for this year's loan and the fact that he could convert into this new loan is clearly set out in that prospectus. It is clearly set out in the advertisements which we published in regard to the loan and I really do not think that there is any obligation on us to do any more than that.
They should have got a conversion form as well.
They can still convert, of course.