§ Mr. Nelsonasked the Secretary of State for Trade (1) whether he will introduce legislation to require parties to disclose their identity where they act in concert to acquire over 5 per cent. of the shares of a public company but where individually they purchase under 5 per cent;
- (2) whether he is considering any further statutory controls over foreign investment in the light of the covert purchase and "dawn raid" on shares on Consolidated Goldfields between October
24 1979 and 12 February of the current year; - (3) whether he is satisfied that the process by which stock jobbers can go short of significant quantities of stock in a public company which is the subject of a partial takeover bid and at a price well above the market price previously obtaining is in the interests of fair trade and small shareholders generally;
- (4) what consideration he has given to the acquisition by De Beers Consolidated Mines, its Johannesburg brokers, Davis Barkum Hare, and its London brokers, Rowe and Pitman, of a 25 per cent. share in Consolidated Goldfields; if he has received a copy of the report of the Stock Exchange committee on the methods used; whether he has received reports from the Council for the Securities Industry and, following investigations by his own Department on this matter, whether he will make a statement.
§ Mr. NottI expect soon to receive the report of inspectors I appointed under section 172 of the Companies Act 1948 to investigate the membership of Consolidated Goldfields Limited, and I expect their report to deal with the process whereby De Beers Consolidated Mines Limited acquired a substantial holding in the shares of that company. The chairman of the Stock Exchange has sent me a copy of a report on this subject published last week by the Council of the Stock Exchange.
I shall consider the case for statutory change, including but not confined to the changes suggested in my hon. Friend's questions, in the light of the facts revealed in these reports. The Government believe that both statutory and non-statutory methods of regulation are needed for the supervision of the securities market. The operation of the market and the rules which govern the behaviour of members of the Stock Exchange are not governed by the Companies Acts and are matters primarily for non-statutory regulation by the Stock Exchange Council.
I have no doubt that the Council for the Securities Industry will wish to study as soon as possible the report of the Stock Exchange and its recommendations with the purpose of considering the adequacy of the existing rules. When it does so, I trust that it will have 25W regard to the fact that the strength of a system of non-statutory regulation is its ability to ensure that conduct is governed by the spirit and not merely the letter of the law.