HC Deb 30 July 1924 vol 176 cc2051-2
42. Mr. A. M. SAMUEL

asked the Under-Secretary of State for Air whether he is aware that Sir H. Hambling and Major Hills wire nominated by His Majesty's Government as directors of Imperial Airways, Limited; whether the prospectus was sanctioned by the Government; and, if so, why Article 4 of the company's articles contradicted the terms of the prospectus, in that it stated that the purchase price payable was £148,750, based on the Report of Brigadier-General Bagnall Wild and Lieut.-Colonel Mervyn O'Gorman, nominated by the Air Ministry and Lloyds; whether he is aware that the prospectus states that there were no promotion profits, while Article 4, though not referred to in the prospectus, binds subscribers not to object to the agreement mentioned in such article, and removes liability of a promoter or director to account for any benefit derived by him by mason of any promoter or director of the company being a vendor to it, or by reason of purchase consideration having been fixed by the vendors without any independent valuation, or of the board not being an independent board; and what is the reason for barring the rights of subscribers against a promoter or director without giving notice in a prospectus of the proposed waiver?


As regards the first part of the question, the answer is in the affirmative. As regards the remaining parts, the Government were not concerned with the terms of the prospectus, except to see that it did not misrepresent the arrangement between the Government and the company.


Is the hon. Gentleman aware that this prospectus breaks one of the prime commercial canons, and that it is very wrong that a Government Department should show so bad an example in being party to a practice in the issue of a prospectus which is regarded as undesirable?


The only business of the Government was to ascertain how far the prospectus met the arrangement which has been made between the company and the Government, and in no respect that we could discover did it transgress. So far as any other consideration is involved, I think that is a matter for the shareholders.