§ Mr. Leeasked the Secretary of State for Trade if he is satisfied with the effectiveness of section 54 of the Companies Act whereby loans by a company for the purchase of its own shares though generally forbidden are permitted if established to be in the ordinary course of business; and if in particular he considers the penalties for breaches of this section are adequate.
§ Mr. Clinton DavisI do not consider the penalty for breach of section 54 of the Companies Act 1948 to be adequate, and schedule 2 to the Companies Bill includes a substantial increase in the fine payable on conviction and provides for imprisonment for up to two years.