HL Deb 23 October 1985 vol 467 cc1124-6

29A Line 12, after ("companies") insert ("including a company or companies capable of being wound up under Part XXI of the 1985 Act").

Lord Bruce of Donington

My Lords, in moving this amendment I should like to move at the same time Amendment No. 29B, because both amendments are substantially on the same point. 29B Page 7. line 24, after ("section") insert (" "company" includes a company which may be investigated under section 453 of the 1985 Act and"). I should like to thank the noble Lord the Minister for the very clear explanation he has given concerning these matters which affect a vital section of our community, the directors of limited liability companies. I think that his explanation combined with the text of the Bill represents a very great advance indeed. The House and indeed another place did not like the idea of automatic disqualification. They preferred to adhere to the British tradition that a person should not be required to prove himself innocent but that a charge should be brought against him directly, that he should be accused and that the onus of proof should lie upon those prosecuting him. Therefore I believe that these new clauses represent a very distinct advance.

The two amendments that I am submitting for your Lordships' consideration would extend the net rather wider. Amendment No. 29A is moved because otherwise discreditable behaviour in relation to an overseas company—for example, in Jersey or the Isle of Man—could not be considered by the court. It should be noted that disqualification is already limited to United Kingdom companies, so crooks will tend to use foreign companies anyway. The second amendment follows exactly the same reasoning. In my view, if it is not so, no disqualification can follow investigations of overseas companies and misconduct should be on the grounds of disqualification from being a director of a British company. In other words, all I want to do is extend the net.

As your Lordships will be aware I have had consultations with the noble Lord about parts of the Bill and I have been assured by him that the Bill already provides for this. It is not my intention to press these amendments. I am moving them so that the noble Lord may answer officially, giving chapter and verse and the actual references, in order that this matter is made entirely clear. I beg to move.

5 p.m.

Lord Lucas of Chilworth

My Lords, I thank the noble Lord for his explanation. Indeed, I should like to take this opportunity to set out clearly why these two amendments are not necessary. Directors of companies being capable of being wound up under Part 21 of the 1985 Act are already covered by the clause. This is because Clause 91(2) provides that Section 295 of the Companies Act 1985 applies for the purposes of Sections 7, 8 and 10 of this Bill. That ensures that Section 295(3) of the 1985 Act, which defines "company" as including any company which may be wound up under that part of the Act to which I have referred, operates to apply the same definition of company to the disqualification provisions in the Bill.

The second amendment to which the noble Lord drew attention is also unnecessary since the provisions of Clause 13 as we have amended it already cover overseas companies, which are the subject of Section 453 of the Companies Act 1985. The definition of "company" which applies for the purposes of that clause goes wider than that provided in Section 453 of the 1985 Act. Any information that is obtained from investigations into the latter type of companv under Section 447 can be used to disqualify its directors. That is the formal position to which the noble Lord referred.

Lord Bruce of Donington

My Lords, I ask the noble Lord to clarify this point just a trifle more. When he referred to Clause 13, was he referring to Bill 240, which is the larger, explanatory Bill which incorporates the various Commons Amendments, or was he referring to Bill 127? The noble Lord will appreciate that there may be confusion unless he makes that distinction absolutely clear.

Lord Lucas of Chilworth

My Lords, I was referring to the old Clause 8, which I believe is in Bill 1 27.

Lord Bruce of Donington

My Lords, I am much obliged and beg leave to withdraw the amendments.

Amendments to the Motion, by leave, withdrawn.

On Question, Motion agreed to.