§ Mr. Cantasked the Secretary of State for Trade and Industry what is the reason for the delay in his Department's reply, which was promised at an early date several months ago, to the request made to it by Mr. M. J. G. Moir in 1970 that it institute a random sample survey to
178W
§ Mr. Gordon CampbellThe following table gives details by city or county area —except in the case of expenditure by water boards—of the £54 million of work so far approved, and an indication of the further work likely to be approved, having regard to the schemes still under consideration.
obtain an estimate of the number of contraventions by public and private companies respectively of each Section of each Act administered by his Department, capable of being contravened.
§ Mr. RidleyI apologise for the delay in replying but the hon. Member is mistaken no such promise was given. The making of a survey of the kind proposed presents a number of administrative 179W problems and involves a substantial expenditure of time and money, and I have decided that the potential value of the result does not justify the expenditure of any public money involved.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he will take steps to implement the Jenkins Committee's recommendations regarding prospectuses.
§ Mr. RidleyThese recommendations are being considered in our current review of company law.
§ Mr. Cantasked the Secretary of State for Trade and Industry why he will not introduce legislation to provide that his Department's companies annual reports be audited by independent experts, with the duty of stating whether in their opinion such reports represent a true and fair view of the matters they must by statute cover, and also whether the conduct of his Department's responsibilities revealed in such reports has been reasonable having regard to the provisions of the relevant statutes.
§ Mr. RidleyI do not accept the false analogy, which is implied, with company accounts. I hope that the hon. Member is not suggesting that statutory reports made to Parliament are either biassed or untrue. Parliament must be the judge whether the companies annual reports show that the Department has satisfactorily discharged its responsibilities in this context.
§ Mr. Cantasked the Secretary of State for Trade and Industry why he considers disclosure of his Department's conduct of its duties to Parliament and the public under Section 451 of the Companies Act, 1948, to be less important than disclosure by public companies of their affairs to their shareholders and the public.
§ Mr. RidleyI reject both the implication that the companies annual report can be compared with the various documents which companies are by law required to make public and the implication that the report is inadequately informative.
§ Mr. Cantasked the Secretary of State for Trade and Industry what action his Department has taken in respect of public 180W companies to protect the investing public from managerial negligence.
§ Mr. RidleyWe use the powers under the Companies Acts to seek to prevent breaches of those Acts and to pursue those responsible; managerial negligence does not necessarily entail such a breach.
§ Mr. Cantasked the Secretary of State for Trade and Industry what action his Department took in the Dollar Land case to protect the investing public from managerial negligence.
§ Mr. RidleyWe have put pressure on this company to secure publication of its accounts.
§ Mr. Cantasked the Secretary of State for Trade and Industry what changes he proposes in the future use by his Department of its investigatory powers, following the statement about Rolls-Royce Limited's financial difficulties being known to the Industrial Reorganisation Corporation but unknown to his Department, as disclosed in evidence recently given to the Expenditure Committee.
§ Mr. RidleyI am aware of the evidence given by the former Chairman of the I.R.C. to the Expenditure Committee. His view as to the state of Rolls-Royce's finances as expressed to that Committee does not in all respects concur with that contained in I.R.C.'s official reports.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he accepts the finding of his inspectors in the case of Pergamon Press Limited that shareholders in public companies are not given all the information they may reasonably expect pursuant to Section l65(b)(iii) of the Companies Act, 1948, unless such information is physically sent to all shareholders.
§ Mr. RidleyI do not accept the hon. Member's premise that one of the findings of the inspectors appointed to investigate the affairs of Pergamon Press Ltd. was as stated in the Question.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether it is his policy to direct his Department's regulatory activities mainly towards quoted 181W companies and other companies in which he considers the public and the public interest is substantially involved.
§ Mr. RidleyThe Department seeks to secure compliance with the law by all types of company. Account is taken of the degree of public interest which appears to be involved in any particular matter.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he will instruct his Department's review of company law and administration to formulate proposals to ensure that access to legal provisions for the protection of shareholders comes within the financial reach of small shareholders.
§ Mr. RidleyDuring our review we shall consider proposals for widening the scope for shareholders to take legal action, but the question of the cost of such action is not a matter for me.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he will instruct his Department's review of company law and administration to formulate proposals to ensure that the regulatory body uses the powers entrusted to it by Parliament for the protection of the public and of commercial standards.
§ Mr. RidleyOur review will embrace all suggestions which appear to be designed to improve the operation of the present Acts.
§ Mr. Cantasked the Secretary of State for Trade and Industry what source, after the public and its advisers, has produced the most cases noted under Sections 164 and 165(b) of the Companies Act, 1948.
§ Mr. RidleyThe hon. Member will appreciate that any one case may arise from a number of sources simultaneously but, after the public and its advisers, inquiries made by the Department under Section 109 of the Companies Act, 1967, have produced most cases.
§ Mr. Cantasked the Secretary of State for Trade and Industry what is his policy towards the exercise of his powers under Section 37 of the Companies Act, 1967.
§ Mr. RidleyThe policy is to exercise the powers under Section 37 of the Com-182W panies Act, 1967, where I believe the public interest requires it.
§ Mr. Cantasked the Secretary of State for Trade and Industry if he will obtain information about contraventions of the provisions of the Companies, Insurance Companies and Depositors Acts, and include data on this subject in his departmental review.
§ Mr. RidleySuch of this information as is both useful and reasonably available is already obtained.
§ Mr. Cantasked the Secretary of State for Trade and Industry if he will obtain, for the purpose of his review of company law and administration, information as to the cause of the increase since 1958 in the number of public and private company cases respectively noted under Sections 164 and 165(b) of the Companies Act, 1948.
§ Mr. RidleyI do not require this information, which would be very costly and time-consuming to collect for the review of company law.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he will seek additional powers to enable himself to take action to protect investors and enforce commercial standards.
§ Mr. RidleyAdditional powers will be sought if the current review of company law shows either of these objectives to be desirable.
§ Mr. Cantasked the Secretary of State for Trade and Industry why the figures he gave on 18th October, 1971, for applications under Section 172(3) of the Companies Act, 1948, excluded that sent to his Department by some 253 members of Hartley Baird Limited on 26th August, 1970; and whether he will now appoint inspectors in response to that application.
§ Mr. RidleyAlthough that application was said by the applicants to be made under Section 172(3), it purported to seek a great deal of information irrelevant to the purposes of that Section. That Section has only one main purpose, to which the powers given by it are confined, and the Department therefore more appropriately pursued the matter using its powers under Section 173. It is accordingly in the statistics of the use of Section 173 that this case appears.
183WThe answer to the latter part of the Question is "No".
§ Mr. Cantasked the Secretary of State for Trade and Industry what was the average length of time during 1970 between the date of reference of company cases by the police to his Department and the date of appointment of inspectors by his Department where this was done.
§ Mr. RidleyIt will take some time to collect this information and I will write to the hon. Member as soon as possible.
§ Mr. Cantasked the Secretary of State for Trade and Industry what proportion of the applications received by his Department since 1948, under Section 172(3) of the Companies Act, 1948, have been rejected.
§ Mr. RidleyDuring that period the Department has received nine applications under Section 172(3) of the Companies Act, 1948; of these, four were accepted and five were refused.
§ Mr. Cantasked the Secretary of State for Trade and Industry what the numbers were respectively of private and public company cases in 1969 and in 1970, in relation to which reports by the Official Receiver under Section 236(2) of the Companies Act, 1948, stated that in his opinion fraud had been committed.
§ Mr. RidleyThe Official Receiver has a discretion whether or not to submit a further report to the court under Section 236(2) of the Companies Act, 1948. In 1969, one report was submitted in respect of a public company and 30 in respect of private companies. The numbers in 1970 were one and 23 respectively. Reports under Section 236(2) of the Companies Act, 1948, submitted to the court during 1969 and 1970 reported prosecutions, convictions and sentences for fraud and other offences.
§ Mr. Cantasked the Secretary of State for Trade and Industry if he will obtain, for the purpose of his Department's current review of company law and administration, figures of the proportion of cases submitted to it by the police upon which it has not acted.
§ Mr. RidleyI do not intend to obtain figures which are not relevant to the184W review of company law. All reports are carefully considered and the number on which no further action is taken is not significant.
§ Mr. Cantasked the Secretary of State for Trade and Industry what is his policy with regard to the exercise of his powers under Section 210 of the Companies Act, 1948, for the protection of shareholders from oppression.
§ Mr. RidleyThe Department's policy is to consider proceedings under Section 210 of the Companies Act, 1948, where circumstances appear to justify such action. I am aware that in the light of decided cases there are legal difficulties in pursuing this relief, and I will take these into consideration in the course of the current review.
§ Mr. Cantasked the Secretary of State for Trade and Industry on how many occasions since 1958 public examinations have been held under Section 270 of the Companies Act, 1948.
§ Mr. RidleyNo public examinations under Section 270 of the Companies Act, 1948, have taken place since 1958.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether he will seek to implement the recommendations of the Jenkins Committee on Company Law for the extension of the public examination procedure.
§ Mr. RidleyI will keep the matter in mind during the current review of company law.
§ Mr. Cantasked the Secretary of State for Trade and Industry what was the date upon which his Department exercised its powers under Section 109 of the Companies Act, 1967, in respect of the Competitive Insurance Company Limited.
§ Mr. Ridley22nd April, 1971.
§ Mr. Cantasked the Secretary of State for Trade and Industry (1) what was the date upon which his Department concluded that Section 68(1)(b) of the Companies Act, 1967, applied to the Competitive Insurance Company Limited;
(2) what was the date upon which his Department gave the Competitive Insurance Company Limited notice under 185W Section 68(3) of the Companies Act, 1967 ;
(3) what was the date upon which his Department first decided that the conditions antecedent to the use of Section 80(1) of the Companies Act, 1967, might apply to the Competitive Insurance Company Limited;
(4) what was the date upon which his Department exercised its powers under Section 80(1) of the Companies Act, 1967, in respect of the Competitive Insurance Company Limited.
§ Mr. RidleyFollowing the exercise on 22nd April, 1971, of the Department's powers under Section 109 of the Companies Act, 1967, and after an announcement by the company on 26th May that it would accept no more insurance business, that it was advising policyholders to seek alternative cover and that it had instructed Messrs. Cork W. H. Gully and Co. to advise on its affairs, the Department put in hand the preparation of a petition for the company's winding up. But before the petition could be presented the company resolved on 3rd June, 1971, to go into voluntary liquidation.
The Department did not invoke either Section 68 or Section 80 of the Companies Act, 1967, in this case.
§ Mr. Cantasked the Secretary of State for Trade and Industry whether the affairs of the Competitive Insurance Company Limited were kept under close scrutiny throughout 1967.
§ Mr. RidleyYes.