§ Mr. CLARRY
I beg to move, in page 3, line 9, after "capital," to insert "or debenture stock."
In Committee the Parliamentary Secretary referred to issuing debenture stock at a discount. This Amendment does not refer to that, but deals with underwriting commission paid on the issue of debenture stock. I understand that the proceeds of any issue of share capital can only be applied for the purpose to which the capital is properly applicable. I understand from the advice of counsel that the payment of underwriting commission is not a matter which can be dealt with as applicable to the use of capital issued in that way, and this Amendment is moved to give requisite Parliamentary authority for the payment of underwriting commission to be taken out of capital account.
§ 10.18 p.m.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
Debenture stock has always been in a position different from share capital. The matter is governed by case law and it would be most inadvisable if an Amendment were introduced haphazard, so to speak, in a Bill relating to gas undertakings which could be construed as casting some doubt on the law which is believed to be of entirely general application. There is, on my information, a clear rule followed by cases in the courts for showing that commission allowances or discounts paid for subscribing debentures have to be registered under the Companies Act, and it is inconceivable to think that the Companies Act would make it necessary to provide a registration 1660 of the commission paid if there were any doubt as to the legality of paying the commission. For those reasons, I am advised that this Amendment is unnecessary and that the law already permits what the hon. Member desires; and as it would be inadvisable to insert a matter which would cause doubt on the generality of its application, I hope that he will not press the Amendment.
§ Mr. CLARRY
I beg to ask leave to withdraw the Amendment, and, in view of the Parliamentary Secretary's explanation, I do not propose to move other Amendments in my name to the same effect.
§ Amendment, by leave, withdrawn.