§ Mr. Johnstonasked the President of the Board of Trade whether he is aware of the issue of a prospectus to the public in January, 1937, asking for subscriptions to a debenture stock issued by Richard Thomas and Company, of Ebbw Vale; that an announcement has now been made that the estimates of working capital were fallacious and that an additional sum of £4,000,000 will be required; and that the original debenture stock holders are now to rank in security after the new subscribers and are thereby prejudiced in the security and cover for their investments; and whether, in any legislation to amend the Companies Acts, he will take steps to ensure that persons who issue such prospectuses to the detriment of subscribers will be made personally liable for any losses sustained?
Mr. StanleyAs regards the first part of the question, I am aware that an offer for sale of debenture stock of Richard Thomas and Company, Limited, was made in January, 1937; as regards the second part, I understand that the costs of construction and the requirements for working capital were underestimated, for reasons which are explained in a statement now before the debenture stock holders; as regards the third part, I understand that before the proposal to issue prior lien debenture stock can be carried into effect, the consent of the holders of the existing debenture stock must be obtained and that a meeting has been convened for the 14th July, 1938, for the purpose of passing an extraordinary resolution approving the proposed new issue; as regards the last part, it does not appear, on the information before me, that there is anything in this case which calls for amendment of the Companies Act, 1929.