§ 13 and 14. Sir Reginald Clarry
asked the President of the Board of Trade (1) whether his attention has been drawn to the possibilities of sinister exploitation of his Department by the provisions of Section 135 of the Companies Act, 1929, which prescribes that an inspector may be appointed on the application of members holding not less than one-tenth of the shares issued; and will he consider appropriate amendments to the Act;
(2) what protection or redress can be afforded under the Companies Act, 1929, to sound public companies, such as railways, insurance, banks, and public utilities, against the exploitation for their own purposes of a well-organised 10 per cent. shareholding, utilising even the threat: of their power under Section 135 of that Act?
§ Mr. Stanley
I am not aware that Section 135 of the Companies Act, 1929, which applies only to companies registered under that Act, affords the possibilities of abuse to which he refers. The appointment of an inspector is not made as a matter of course on the application of members of a company holding the requisite number of shares. Under the Section the application must be supported by such evidence as the Board of Trade may require to show that the applicants have good reason for the application and are not actuated by malicious motives. The procedure of the Department in regard to these applications is such as to ensure that these requirements are fully observed. A further deterrent against vexatious applications is afforded by Subsection (3) of Section 136, which empowers the Board of Trade, if they think proper, to direct that the expenses of an investigation shall be paid in whole or in part by the applicants. I do not, in the circumstances, consider that the suggestions put forward afford any grounds for amending the Act.
§ Sir R. Clarry
May I inquire whether all the relevant information to enable a 182 company to judge whether there is malice or misunderstanding is available to companies?