§ Baroness Blatchasked Her Majesty's Government:
Whether they intend to submit the draft Memorandum and Articles of Association of the Post Office Company to parliamentary scrutiny before it is adopted by the sole shareholder. [HL4355]
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§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)The Government intend to lay copies of the proposed Memorandum & Articles of Association of the Post Office Company in the Libraries of each House as soon as they are ready to be put to an extraordinary general meeting of shareholders.
§ Baroness Blatchasked Her Majesty's Government:
Whether it is the case that the only person entitled to enforce the terms of the Articles of Association of the Post Office Company will be the sole shareholder; and, if so, what steps would be taken by them and what sanctions would be available if there were a breach of the article requiring the prior disclosure of major transactions in accordance with Stock Exchange requirements. [HL4356]
§ Lord Sainsbury of TurvilleThe noble Baroness is correct that the Articles of Association of the Post Office Company will form a contract between the Post Office Company and its shareholder and it will be for the shareholder to enforce the terms of the articles.
The shareholder will be able to call the directors to account in all the normal ways available to shareholders, including calling Extraordinary General Meetings of the company, taking legal action for breach of contract and/or calling for and voting on dismissal of directors.
§ Baroness Miller of Hendonasked Her Majesty's Government:
Whether it is still their view, as expressed by the Minister for Science on 11 July (H.L. Deb., col. 181) that, in comparison with inserting a provision in the Memorandum and Articles of Association of the Post Office Company, disclosure of major transactions in line with Stock Exchange requirements would be "unnecessarily onerous and inflexible"; and, if so, in what way do the Post Office Company's commercial operations differ from ordinary commercial concerns. [HL4354]
§ Lord Sainsbury of TurvilleThe Post Office Company will be subject to the Postal Services Act and to the relevant provisions of the Companies Acts.
Our purpose has been to ensure a regime for disclosure of information to shareholders analogous to that obtaining for the generality of commercial undertakings. Had the disclosure requirements been fixed by statute, they would not have been able to develop in line with changes in commercial practice and in the Stock Exchange Listing Rules. The Post Office Company would also have been denied the flexibility which is available to listed companies through consulting the UK Listing Authority at an early stage about the application of the rules to a particular transaction.