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Companies Acts (Amendment)

Volume 52: debated on Thursday 24 April 1913

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54 and 55.

asked (1) whether, in the circumstances disclosed in connection with the flotation and issue of the capital of the American Marconi Company in London, whereby the British shareholders have lost some millions of money, the Government contemplate any amendment of the Companies Acts so as to make it compulsory on the part of the promoters of such an issue to make a full disclosure of all material matters connected with the company; and (2) whether, in view of the circumstances disclosed in connection with the American Marconi Company, the Government are prepared to appoint a Committee, similar to the Committee appointed on 12th November, 1894, to inquire into the issue of the shares of that company in London, and to consider whether consequent thereon any and, if any, what modifications of the company law are necessary to protect the interests of British investors in the issues in this country of foreign corporations?

Since the Committee of 1894, to which he refers, a Departmental Committee, appointed in 1905 under the chairmanship first of Lord Loreburn and afterwards of Sir C. M. Warmington, considered the whole question of the amendment of the Companies Acts, and in particular the requirements to be imposed on foreign companies carrying on business or issuing prospectuses inviting subscriptions in the United Kingdom. The Commttee's recommendations on this point will be found in paragraph 19 of their Report. The Committee declared that in their opinion these companies could not with advantage be compelled to comply with the requirements of the British Companies Acts as to prospectuses. The Companies (Consolidation) Act of 1908, which was passed in consequence of the Committee's Report, gives effect to the above recommendations in Section 274. There does not appear at present any sufficient reason for further inquiry or legislation on the subject.

Arising out of that reply, may I ask whether the Committee to which the right hon. Gentleman refers had before it evidence of any heavy public loss and grave ministerial complications when arriving at their conclusions, and whether, in the absence——

As the hon. Member has the question all written out, he had better put it on the Paper.