§ 142 Insert the following new clause:
§ ("Amendment of section 174 of the 1948 Act
§ .—(1) Subject to subsection (8) below, section 174 of the 1948 Act (power to impose restrictions on shares or debentures) shall have effect subject to the following modifications.
§ (2) In subsection (1) (power of Secretary of State to impose restrictions) the words from "and that" to "Act" shall cease to have effect.
(3) The following subsections shall be inserted after subsection (2)—
(2A) Where shares are subject to the restrictions imposed by subsection (2)(a) of this section any agreement to transfer the shares or in the case of unissued shares the right to be issued with the shares shall be void except an agreement to sell the shares on the making of an order made under subsection (3A)(b) of this section.
(2B) Where shares are subject to the restrictions imposed by subsection (2)(c) or (d) of this section any agreement to transfer any right to be issued with other shares in right of those shares or to receive any payment on those shares (otherwise than in a liquidation) shall be void except an agreement to transfer any such right on the sale of the shares on the making of an order made under subsection (3A)(b) of this section.
(4) In subsection (3) (power of court to lift restrictions) for the words from "and the court may" to the end there shall be substituted the words "for an order directing that the shares shall cease to be subject thereto."; and the following subsections shall be inserted after subsection (3)—
(3A) Subject to subsections (3B) and (4A) of this section, an order of the court or of the Secretary of State directing that shares shall cease to be subject to the restrictions imposed by this section may be made only if—
§ (3B) Where any shares in a company are subject to restrictions imposed by this section, the court may on the application of the Secretary of State or the company order the shares to be sold, subject to the approval of the court as to the sale, and may also direct that the 1032 shares shall cease to be subject to those restrictions.
§ (3C) Where an order has been made under subsection (3B) of this section then, on the application of the Secretary of State, the company, the person appointed by or in pursuance of the order to effect the sale or any person interested in the shares, the court may make such further order relating to the sale or to the transfer of the shares as it thinks fit.
§ (3D) Where any shares are sold in pursuance of an order made under subsection (3B) of this section, the proceeds of sale, less the costs of the sale, shall be paid into court for the benefit of the persons who are beneficially interested in the shares; and any such person may apply to the court for the whole or part of those proceeds to be paid to him.
§ (3E) On an application under subsection (3D) of this section the court shall, subject to subsection (3F) of this section, order the payment to the applicant of the whole of the proceeds of sale together with any interest thereon, or if any other person had a beneficial interest in the shares at the time of their sale, such proportion of those proceeds and interest as is equal to the proportion which the value of the applicant's interest in the shares bears to the total value of the shares.
§ (3F) On granting an application for an order under subsection (3B) or (3C) of this section the court may order that the costs of the applicant shall be paid out of the proceeds of sale; and, where an order under this subsection is made, the applicant shall be entitled to payment of his costs out of the proceeds of sale before any person interested in the shares in question receives any part of those proceeds.".
§ (5) In subsection (4) (continuation of subsection (2)(c) and (d) restrictions) after the words "those shares" there shall be inserted the words "or which is made under subsection (3B) of this section".
(6) The following subsection shall be inserted after subsection (4)—
(4A) Subsection (3A) of this section shall not apply in relation to any order of the court or of the Secretary of State directing that shares shall cease to be subject to any restrictions which have been continued in force in relation to those shares by virtue of subsection (4) of this section.".
(7) In subsection (5) (criminal offences) the following paragraph shall be inserted after paragraph (c) "or
(d) being the holder of any such shares, or being entitled to any such right as is mentioned in subsection (2B) of this section, enters into any agreement which is void by virtue of subsection (2A) or (2B) of this section,".
§ (8) The preceding provisions of this section and the repeal of part of section 174(1) contained in Schedule 4 to this Act shall not have effect in relation to any shares which on the appointed day are subject to the restrictions imposed by section 174 and subsection (3) above shall not apply in relation to any agreement made before the appointed day.").
§ 9.45 p.m.
§ Lord Trefgarne
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 142. With your Lordships' permission, I shall speak also to Amendments Nos. 230 and 240. Amendment No. 142 concerns the power of the Secretary of State to impose restrictions upon shares when difficulty is encountered in discovering information about the ownership of shares in an investigation undertaken on his initiative. I beg to move.
§ Moved, That this House doth agree with the Commons in the said amendment.—(Lord Trefgarne.)
§ On Question, Motion agreed to.