§ 24. Mr. R. C. Morrison
asked the President of the Board of Trade whether he is aware that an increasing number of companies of public interest are being registered with an initial capital of £100 as private companies, to be converted into public companies almost immediately with large capital which is offered to the public, and that this procedure enables companies to avoid the provisions of Sections 94 and 113 of the Companies Act, 1929, and precludes shareholders of such companies from knowledge of the accounts or working capital for a lengthy period; and will he widen the scope of the promised legislation dealing with share-pushers to enable this defect to be remedied?
I am aware of the practice referred to by the hon. Member, and the matter has been noted for consideration when legislation to amend the Companies Act, 1929, is under review. The matter is not, in my view, one which could appropriately be dealt with in a measure relating to share-pushing.
§ Mr. T. Johnston
Is the right hon. Gentleman aware that private companies can solicit public subscriptions and decline to give copies of audited balance sheets and of other documents, as is imposed on public companies; and in view of that fact and of the obvious temptation to swindle that exists, will he not reconsider his view and include this practice and others in the share-pushing legislation?
No evidence was actually given before the Committee on Share-Pushing that this practice had ever been used for share-pushing, but if the right hon. Gentleman has any information which would lead them to believe that in fact it had, I should be very glad of it, and should, of course, consider it.
§ Mr. Johnston
Will the right hon. Gentleman take steps to stop this practice being used on a large scale in regard to the production of mushrooms?
If the right hon. Gentleman will put that question down I will give him what information I can.
§ Mr. R. C. Morrison
Is the Minister not aware that these replies are simply an invitation to certain people to carry on, on a very large scale, practices that swindle the public?
The hon. Gentleman assumes that this practice has been used to swindle the public, but no such evidence was submitted at all before the Committee. If he has any, I shall be only too glad to have it.