§ Mr. KILEYasked the Parliamentary Secretary to the Ministry of Munitions if a charge on the undertaking and property, including the uncalled capital, of the British Cellulose and Chemical Manufacturing Company, Ltd., was registered to the amount of £1,950,000 in favour of the Minister of Munitions on the 5th February, 1919; has the Minister of Munitions agreed to accept payment of £1,450,000 of this registered secured debt in the profit-sharing preference shares of a different company, viz., the British Cellulose and Chemical Manufacturing (Parent) Company, Ltd.: has the balance of his claim, viz., £500,000, been paid off or how this claim was dealt with otherwise than by payment; what is the date of and who are the parties to the agreement for satisfaction of the claim, as to £1,450,000, against the one company by acceptance of profit-sharing shares in the other company; and if there is any limit imposed by the Government on the fees or number of directors?
Mr. HOPEWith regard to the first part of the question, a debenture, charging the undertaking and property, including the uncalled capital, of the British Cellulose and Chemical Manufacturing Company, Limited, was executed on the 5th February, 1919, by the company in favour of the Ministry. This debenture, which was for £1,950,000, was in respect of £1,250,000 advanced by the Ministry and £700,000 advanced by independent parties for whom the Ministry thereby became trustee. This debenture was registered with the Registrar-General of Joint Stock Companies on the 12th February, 1919. With regard to the second and third parts of the question, I would refer the hon. Member to the reply given to him on the 1st March. The total charges held by the Ministry on its own behalf was £1,450,000 (£200,000 being, as stated, a separate charge on the power plant), and not £1,950,000. From this it will be seen no balance of £500,000, or any other amount, remains due to the Government.
It was agreed to accept shares in the parent company because the other company is being voluntarily wound up, and its assets will be taken over by the parent company, which owns the whole of the shares. It was provided that the agreement 677W to take shares was not to take effect until a liquidator of the other company was appointed. With regard to the fourth part of the question, the date of the relative agreement is 28th Febraury, 1920, and the parties to it are the British Cellulose and Chemical Manufacturing (Parent) Company, Limited, and the Ministry of Munitions. The question of the number of directors and their fees is provided for by the Articles of Association. As stated before, the fees received by the two Government directors will be paid by them into the Exchequer, and they will each receive remunerations from the Government at the rate of £500 per annum.
§ Mr. KILEYasked the Parliamentary Secretary to the Ministry of Munitions in what proportions the proceeds of the new issue of the British Cellulose and Chemical Manufacturing (Parent) Company, Limited, will be applied, respectively, to payments of liabilities, to provision of new plant, and to cash working capital; do the amounts so available for provision of new plant provide for the entire equipment for manufacture of the nine tons of artificial silk per day referred to in the prospectus; can the Minister say if the directors can engage in the manufacture of any class of goods; and, if so, are they at liberty to apply to the public for further increases of capital?
Mr. HOPEWith regard to the first three parts of the question, I have no information beyond what is contained in the prospectus and Memorandum and Articles of Association of the company. With regard to the last part of the question, I have already stated that no debentures or further issues of the existing preference shares can be issued without the consent of the Government. I may add that no ordinary shares can be issued except for cash.
§ Mr. KILEYasked the Parliamentary Secretary to the Ministry of Munitions to what extent, if any, the vendors to the British Cellulose and Chemical Manufacturing (Parent) Company, Limited, will be out of pocket as the result of the financial operations ending with the appropriation of the proceeds of the pending share issue, and the receipt by such vendors of 2,300,000 ordinary shares; will these 2,300,000 shares represent any bona fide 678W case investment; and, if so, how much, after allowing for all amounts repaid or repayable by the company and all amounts, if any, represented by profits or commissions made in connection with the financing of the two companies involved?
Mr. HOPEThe hon. Member is evidently under some misapprehension with regard to this question. The whole of the shares of the British Cellulose and Chemical Manufacturing Company, Limited, are owned, either directly or through its nominees, by the British Cellulose and Chemical Manufacturing (Parent) Company, Limited, and therefore, there can be no vendors to the Parent Company in respect of this issue; moreover, there has been no recent issue of ordinary shares. The remainder of the question, therefore, does not arise; but for a full statement of the Company's financial history I would refer the hon. Member to the Report of the British Cellulose Enquiry Committee, dated 31st July, 1919.