HL Deb 27 March 1980 vol 407 cc1062-3

200 Insert the following new clause: Criminal penalties for breach of s. (Prohibition of loans, etc., to directors and connected persons)

.—(1) A director of a relevant company who authorises or permits the company to enter into a transaction or arrangement knowing or having reasonable cause to believe that the company was thereby contravening section (Prohibition of loans, etc., to directors and connected persons) above shall be guilty of an offence.

(2) A relevant company which enters into a transaction or arrangement for one of its directors or for a director of its holding company in contravention of section (Prohibition of loans, etc., to directors and connected persons) above shall be guilty of an offence.

(3) A person who procures a relevant company to enter into a transaction or arrangement knowing or having reasonable cause to believe that the company was thereby contravening section (Prohibition of loans, etc., to directors and connected persons) above shall be guilty of an offence.

(4) A relevant company shall not be guilty of an offence under subsection (2) of this section if it shows that, at the time the transaction was entered into, it did not know the relevant circumstances.

(5) A person guilty of an offence under this section shall be liable—

  1. (a) on conviction on indictment, to a term of imprisonment not exceeding two years or a fine, or both; and
  2. (b) on summary conviction to a term of imprisonment not exceeding six months or a fine not exceeding the statutory maximum, or both."

7.12 p.m.

Lord LYELL

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 200. This deals with criminal penalties for breaches. In Amendment No. 200 we make it an offence for a director of a public company to authorise or permit any contravention, or for a person to procure such a transaction in contravention of any of the prohibitions. It is the company itself which may also be liable to a fine. I should stress that only deliberate conduct in the full knowledge of relevant circumstances, or on the basis of a wilful rejection of that knowledge, can be the subject of any prosecution under Amendment No. 200.

Moved, That this House doth agree with the Commons in the said amendment.—(Lord Lyell.)