HL Deb 27 March 1980 vol 407 cc1108-9

211 After Clause 45 insert the following new clause:

"Connected persons.

.—(1) For the purposes of this Part of this Act, a person is connected with a director of a company if, but only if, he is—

  1. (a) that director's spouse, child or step-child; or
  2. (b) except where the context otherwise requires, a body corporate with which the director is associated; or
  3. (c) a person acting in his capacity as the trustee (other than as trustee under an employees' share scheme or a pension scheme) of any trust the beneficiaries of which include the director, his spouse or any of his children or step-children or a body corporate with which he is associated or the terms of which confer a power on the trustees that may be exercised for the benefit of the director, his spouse or any of his children or step-children or any such body corporate; or
  4. (d) a person acting in his capacity as partner of that director or of any person who, by virtue of paragraph (a), (b) or (c) above, is connected with that director;
unless that person is also a director of the company.

(2) In subsection (1) above a reference to the child or step-child of any person includes a reference to any illegitimate child of that person, but does not include a reference to any person who has attained the age of 18 years.

(3) For the purposes of this Part of this Act—

  1. (a) a director of a company is associated with a body corporate if, but only if, he and the persons connected with him, together, are interested in shares comprised in the equity share capital of that body corporate of a nominal value equal to at least one-fifth of that share capital or are entitled to exercise or control the exercise of more than one-fifth of the voting power at any general meeting of that body; and
  2. (b) a director of a company shall be deemed to control a body corporate if, but only if—
    1. (i) he or a person connected with him is interested in any part of the equity share capital of that body or is entitled to exercise or control the exercise of any part of the voting power at any general meeting of that body; and
    2. (ii) that director, the persons connected with him and the other directors of that company, together, are interested in more than one-half of that share capital or are entitled to exercise or control the exercise of more than one-half of that voting power.

For the purposes of this subsection, a body corporate with which a director is associated and a trustee of a trust the beneficiary of which is or may be such a body corporate shall be regarded as if they were not connected with that director.

(4) The rules set out in section 28 of the 1967 Act (interest in shares) shall have effect for the purposes of subsection (3) above with the substitution of the words "more than one-half" for the words "one-third or more" in subsection (3)(b) of that section, and in subsection (3) above—

  1. (a)"equity share capital has the same meaning as in section 154 of the 1948 Act; and
  2. (b) references to voting power the exercise of which is controlled by a director shall, without prejudice to the other provisions of that subsection, include references to voting power the exercise of which is controlled by a body corporate controlled by that director.

Viscount TRENCHARD

My Lords, I do not intend to describe Amendment 211. My noble friend Lord Lyell mentioned it in his general introduction to this section. It covers connected persons, family and otherwise. I am aware that there are amendments tabled to it, and that will give me an opportunity to speak to those points which I know Members of the House wish to press. I beg to move.

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