HC Deb 26 February 1935 vol 298 cc938-41
29 and 40. Sir CYRIL COBB

asked the President of the Board of Trade (1) whether he is aware that the provision that the name of the real holder of shares in a limited liability company shall appear with his address on the records of Somerset House is now defeated by the device of registering shares in the name of a nominee company; and whether he proposes to take early steps to make good this defect in the operation of the law intended to protect the public against abuse of the facilities provided by limited liability;

(2) whether he is aware that the names and addresses of owners of shares held by nominee companies appear on the books of nominee companies; and will he take the necessary measures to ensure that in future, in the event of the transfer of such shares from or to a nominee company, the names and addresses of the beneficial or other owners in the possession of the nominees be recorded on the transfer deed for identification of ownership in order that this information may appear upon the share registers at Somerset House?

36. Mr. JOHN WILMOT

asked the President of the Board of Trade whether his attention has been called to the fact that a large proportion of the shares of James and Shakespeare, Limited, were registered in the name of bank nominees; and whether, in view of the fact that this practice makes it impossible to discover who are beneficial owners, he will take steps for the purpose of ensuring that the returns of company shareholders disclose the names of the beneficial owners?

37. Mr. DAVID GRENFELL

asked the President of the Board of Trade whether, in view of the concealment of the names of nominees holding shares in Messrs. James and Shakespeare, he has considered the advisability of amending the Companies Act of 1929 to prevent further misuse of the law of limited liability in the promotion of gambling operations in the commodity market?

Mr. RUNCIMAN

There is no legal requirement that the name of the beneficial owner of shares in a limited company shall be entered in the register of members, and indeed Section 101 of the Companies Act, 1929, provides that no notice of any trust, express, implied or constructive, shall be entered on the register or be receivable by the Registrar of Companies registered in England. Any liability or obligation attaching to a share falls to be met by the person in whose name the share is registered. The suggestion that the law should be amended in regard to the registration of shares held by nominee companies has been noted for investigation when the amendment of the Companies Act is under consideration.

Dr. ADDISON

Does that mean that the banks themselves are responsible for any losses that may arise out of these gambles?

Mr. RUNCIMAN

I think my right hon. Friend heard me aright when I said that any liability or obligation attaching to a share falls to be met by the person in whose name the share is registered. That would apply equally to a bank.

35. Major NATHAN

asked the President of the Board of Trade whether he will state the time that he estimates will elapse before the examination into the affairs of James and Shakespeare, Limited, has advanced sufficiently far to enable the liquidator to present a report adequate to enable His Majesty's Government to decide whether or not to institute a further and public inquiry into any matters disclosed by such report?

Mr. RUNCIMAN

The winding-up order was made yesterday. The official receiver's inquiries must necessarily be searching and full, and I am unable to say at present when they will reach the stage at which he will be able to make a report. The official receiver is, I understand, aware of the desire of His Majesty's Government that his investigations should be conducted with all possible expedition.

Major NATHAN

Does the right hon. Gentleman seriously state that a report to be produced at an indefinite future date and available only to shareholders and admitted creditors as a result of a private inquiry is a satisfactory method of dealing with the anxiety that is felt by the public and with the suspicions and rumours which are gravely affecting public credit?

Mr. RUNCIMAN

In the first place, I do not believe for a moment that the official receiver will be dilatory; I believe he will conduct his investigations with all due speed. With regard to the effect on the minds of the public, I can only say that when the reports are published, for the use primarily of shareholders and creditors, they will also be open to other people to read.

Major NATHAN

Does the right hon. Gentleman recall that in answer to a question from me it was made specifically clear that the report would not be available to other than the shareholders and admitted creditors; and, further, will he say whether, with his ripe experience, he expects the report of the official receiver to be available within, let us say, 12 months from this date?

Mr. RUNCIMAN

I offer no prophecy whatever as to the speed with which the official receiver will work, but I am sure he will not lose any time. With regard to the other point, I did not say the reports would be withheld from the public. They must be published, but they must be handed over in the first place to those who can see them on behalf of the shareholders and creditors, and that surely makes them as public as they need be.

Mr. WILMOT

Will it be competent for the official receiver to report who are the beneficial owners of that part of the company's capital registered in the names of bank nominees?

Mr. RUNCIMAN

If the hon. Member will put that question on the Paper, I will endeavour to give him an answer.

Mr. DAVID MASON

Is it not the case that this report could be discussed in this House on the Board of Trade Vote?