§ SIR GEORGE CAMPBELLasked Mr. Attorney General, Whether the following paragraph in the published prospectus of a proposed Company is not contrary to the policy and provisions of the Acts for the regulation of Joint 352 Stock Companies; and, if so, whether he will draw the attention of the Public Prosecutor to the attempts to avoid in this way the disclosure of premature contracts:—
The vendors and promoters have also entered into contracts in relation to the expenses of forming and floating the Company, and every applicant for shares shall be deemed to have waived the disclosure of all contracts other than these above specified (i.e. in previous paragraphs); and all applications for shares will he received and allotments made on the footing of no future question being raised, by reason of the omission to specify in the prospectus the dates and names of the parties to any contract?
§ THE ATTORNEY GENERAL (Sir HENRY JAMES)The Companies Act, which requires the disclosure of all contracts in the prospectus of a Company, declares that their concealment shall be deemed fraudulent against persons who take shares on the faith of the prospectus. The non-publication of these contracts, therefore, is not a crime or public offence, so that there is no case for the intervention of the Director of Public Prosecutions. Any opinion I may give could only be for the benefit of two classes of persons—these who will not take shares in such a Company and these who will. Those who will not take shares do not require my advice; and these who will invest their money in such a Company must be possessed of an intellectual capacity which would render it difficult for them to appreciate any advice I may give. I am sure my hon. Friend is not likely to be among the latter class.