HL Deb 24 January 1989 vol 503 cc596-8

3 p.m.

Lord Morris asked Her Majesty's Government:

When they expect to receive the report of the inspectors appointed by virtue of Section 442 of the Companies Act 1985 in the matter of the Minorco/Consolidated Gold-fields takeover bid.

The Secretary of State for Trade and Industry (Lord Young of Graham)

My Lords, I have asked the inspectors to give these inquiries top priority. They have made a good start but their inquiries are at an early stage and I cannot say when their final report will be submitted.

Lord Morris

My Lords, I am most grateful to my noble friend for that Answer. Is my noble friend aware how puzzling it must be even to his most fervent admirers that Her Majesty's Government could contemplate acting upon the advice of the Monopolies and Mergers Commission alone prior to it, and indeed he himself, having sight of the report of the inspectors he had appointed to investigate matters directly affecting not only the bid but the public interest which could result in consideration of criminal proceedings?

Lord Young of Graffham

My Lords, I should explain to my noble friend that these are two entirely separate matters. Inspectors have been appointed under the Companies Act and the Financial Services Act to look at the occurrence of certain matters prior to the bid. The bid was referred by me to the Monopolies and Mergers Commission on the advice of the Director General of Fair Trading. The inspectors have indeed let the Monopolies and Mergers Commission have an interim report which has been studied and is contained in its report to me.

However, these are two separate matters. I believe that they should be kept as such.

Lord Erroll of Hale

My Lords, as to my noble friend's reply, these are not two separate matters. Is it not absolutely central to the public interest to ensure that those who seek control of British companies should be seen to be, if I may use the current colloquialism, squeaky clean before any bid is approved by the Monopolies and Mergers Commission and you, the Secretary of State?

Lord Young of Graffham

My Lords, no. The Government are devoting considerable resources to upholding the integrity of the market. We have had the Companies Act and the Financial Services Act. Investigations play a major part in this process. It would be quite wrong to delay the decision on commercial issues until investigations on other matters of this kind have been completed.

Lord Williams of Elvel

My Lords, we are all anxious to avoid the embarrassment of the Lonrho affair. Will the Secretary of State give an unequivocal assurance that the report of the inspectors will be published?

Lord Young of Graffham

My Lords, I should say to the noble Lord that I cannot detect any embarrassment whatever in the Lonrho affair. Of course, it is the general practice to publish reports on public companies unless there happen to be strong reasons to the contrary. Obviously, I cannot give an undertaking before I have received the report but in the normal way we would tend to publish it.

The Viscount of Oxfuird

My Lords, does the Secretary of State recall the report of the Department of Trade inspectors of July 1980 which clearly demonstrated that the companies associated with the Anglo American group deliberately avoided the disclosures duties of the Companies Act? Why was it considered impolitic to publish the 1986 report of the Department of Trade inspectors?

Lord Young of Graffham

My Lords, these are two separate matters. With regard to the 1980 report, no criminal proceedings followed that investigation. But the law on disclosure of interest and securities was strengthened in the Companies Act 1981. We have also had some modifications to strengthen that aspect in the recent Bill before your Lordships' House.

On the 1986 report—which has no bearing whatever on the monopolies and merger issues—it would be my wish to publish this as soon as possible. However, it would not be appropriate to do so until the issues raised by the report have been fully considered.