HL Deb 27 March 1980 vol 407 cc1075-8

204 After Clause 45, insert the following new clause: Further provisions relating to recognized banks.

.—(1) Subject to section (Transactions, etc., excluded from ss. (Substantial contracts, etc., with directors and others to be disclosed in accounts) and (Further provisions relating to recognised banks)) below, a company which is, or is the holding company of, a recognised bank shall maintain a register containing a copy of every transaction, arrangement or agreement of which particulars would, but for subsection (5) of section (Substantial contracts, etc., with directors and others to be disclosed in accounts) above be required by subsection (1) or (2) of that section to be disclosed in the company's accounts or group accounts for the current financial year and for each of the preceding ten financial years or, if such a transaction or arrangement is not in writing, a written memorandum setting out its terms.

(2) Subject to section (Transactions, etc., excluded from ss. (Substantial contracts, etc., with directors and others to be disclosed in accounts) and (Further provisions relating to recognised banks)) below, a company which is, or is the holding company of, a recognised bank shall before its annual general meeting make available, at the registered office of the company for not less than the period of 15 days ending with the date of the meeting, for inspection by members of the company a statement containing the particulars of transactions, arrangements and agreements which the company would, but for subsection (5) of section (Substantial contracts, etc., with directors and others to be disclosed in accounts) above, be required by subsection (1) or (2) of that section to disclose in its accounts or group accounts for the last complete financial year preceding that meeting, and such a statement shall also be made available for inspection by the members at the annual general meeting.

(3) It shall be the duty of the auditors of the company to examine any such statement before it is made available to the members of the company in accordance with subsection (2) above and to make a report to the members on that statement; and the report shall be annexed to the statement before it is made so available.

(4) A report under subsection (3) above shall state whether in the opinion of the auditors the statement contains the particulars required by subsection (2) above and, where their opinion is that it does not, they shall include in the report, so far as they are reasonably able to do so, a statement giving the required particulars.

(5) Subsection (2) above shall not apply in relation to a recognised bank which is for the purposes of section 150 of the 1948 Act the wholly-owned subsidiary of a company incorporated in the United Kingdom.

(6) Where a company fails to comply with subsection (1) or (2) above, every person who at the time of that failure is a director of the company shall be guilty of an offence and liable on conviction on indictment to a fine and on summary conviction to a fine not exceeding the statutory maximum.

(7) It shall be a defence in proceedings against a person for an offence under subsection (6) above for him to prove that he took all reasonable steps for securing compliance with subsection (1) or (2) above, as the case may be.

(8) For the purposes of the application of this section in relation to loans and quasi-loans made by a company to persons connected with a person who at any time is a director of the company or of its holding company, a company which a person does not control is not connected with him."

Lord LYELL

My Lords, I beg to move that this House doth agree with the Commons in Amendment No. 204.

Moved, That this House doth agree with the Commons in the said amendment.—(Lord Lye11.)

7.37 p.m.

Lord SELSDON moved, as an amendment to the amendment, Amendment No. 204A:

204A In subsection (2), line 6, after ("available") insert ("during business hours").

The noble Lord said: my Lords, I beg to move, as an amendment to Commons Amendment No. 204, Amendment No. 204A. This subsection would require a recognised bank to make available at its registered office for a period of at least 15 days prior to the company's annual general meeting a statement summarising certain transactions with directors and others. That is perfectly laudable and acceptable, but there is no limitation of the hours of the day during which the statement must be made available for inspection.

It therefore appears that the statement must be made available to members of the company throughout all 24 hours of the day, although this obviously is not the Government's intention. Unfortunately, there is a precedent in earlier companies Acts dealing with comparable provisions —for example, Section 57(2) of the 1948 Act and Section 26(4) of the 1967 Act. These state that inspection shall take place: during business hours (subject to such reasonable restrictions as the company in general meeting may impose so that not less than two hours in each day may be allowed for inspection)".

With such provisions in earlier Acts, the omission of a daily time limit in this subsection of the Bill may be taken to indicate a deliberate intent that the statement should be available throughout the whole of each relevant day. Thus, this amendment seems desirable in order to limit availability at least to business hours. I do not propose to press this amendment if the Government make it clear that it is not their intention that the information should be available throughout the 24 hours.

Lord LYELL

My Lords, I thank my noble friend Lord Selsdon for outlining his amendment so clearly. But I hope that he and the House will consider the drafting of subsection (2) of Amendment No. 204. It is clear from that provision that it is the company which is required to make the statement available. It states in line 6 that this availability is to be: at the registered office of the company".

I am advised that the provision as constructed implies that a statement will be available each day for the period during which business is usually transacted. That is the advice I have been given, and for that reason it would appear that my noble friend's amendment is superfluous. However, I give him the assurance that I shall check the situation and let him know.

Lord SELSDON

My Lords, as my noble friend Lord Lyell is, like me, an hereditary Peer, I hope that we are not "superfluous". My advisers disagree with his advisers, but in view of the respect I have for my noble friend and the way in which he has conducted this Bill today, I beg leave to withdraw the amendment.

Amendment to the amendment, by leave, withdrawn.

On Question, Motion agreed to.