HC Deb 09 November 1937 vol 328 cc1575-6
24. Mr. T. Johnston

asked the President of the Board of Trade whether he is aware of the widespread circulation of literature by companies supposedly interested in the production of mushrooms, inviting public subscriptions for the purchase of mushroom beds, guaranteeing a 10 per cent. dividend and a return of the invested capital in full upon six months' notice; that requests by potential subscribers for copies of audited balance sheets and profit-and-loss accounts have been refused on the ground that the companies are private; whether he will himself inquire into the bona fide nature of the transactions; and whether, in any share-pushing legislation, the Government will impose upon private companies of the above character, which invite the public to subscribe, the same obligations as to the issue of prospectuses, balance sheets, and profit-and-loss accounts as are imposed upon public companies?

Mr. Stanley

I am aware of the invitations referred to by the right hon. Gentleman. The matter is under consideration in connection with the proposals for legislation to give effect to the recommendations of the Departmental Committee on Share-pushing and similar activities.

Mr. Johnston

Is the right hon. Gentleman aware that these supposed guarantees as to repayment of capital and the provision of 10 per cent. interest are not given by the directors of these companies but by the companies as such; is he aware that potential subscribers cannot be informed as to the strength of these companies, and can he, in the meantime, take any steps to prevent the investing public being caught?

Mr. Stanley

I think the right hon. Gentleman has done great service in giving publicity to this matter. With his views on these particular companies I entirely agree, and as soon as it is practicable to deal with share-pushing in legislation, I hope we shall include proposals to deal with the matter.

Mr. Johnston

Has the right hon. Gentleman made himself acquainted with the bona fide nature of these companies and their strength?

Mr. Stanley

As I have said, I share the right hon. Gentleman's views as to the bona fides of some of these companies.

Mr. Johnston

Is the right hon. Gentleman satisfied that these companies cannot fulfil the guarantees they are offering in their published literature?

Mr. Stanley

I would not like to go further than to say that I am satisfied that anybody who invests money in them is taking a very great risk.