§ 112 Page 61, line 40, leave out Clause 55.
§ 9.26 p.m.
§ Lord Mackay of Clashfern
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 112.
This amendment proposes the deletion of Clause 55 from the Bill. The clause prevents any company with power to alter its memorandum or articles so as to require the transfer of a share to the company or any other person from exercising such a power in relation to any share allotted before such an alteration is made, subject to two exceptions. First, a company may exercise such a power with the consent of the Secretary of State. Secondly, a company is permitted to take a power of pre-emption requiring a member proposing to transfer shares to offer them first to the company or another member on the same or more favourable terms as those of the proposed transfer.
1006 The clause has been the subject of continuing consultations with outside bodies during the passage of the Bill, like so many of the other clauses both on the need for it in principle and on the difficulties of drafting satisfactorily an exception for powers of pre-emption, while preserving the basic safeguard for shareholders against compulsory purchase of shares which the clause is intended to provide. In the light of the further comments received since Committee stage in the other place, the Government have concluded on balance, that the clause should best be deleted. My Lords, I beg to move.
§ Moved, That the House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)
§ On Question, Motion agreed to.