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Clause 33—(Power To Restrain Fraudulent Persons From Managing Companies)

Volume 441: debated on Monday 28 July 1947

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I beg to move, in page 26, line 27 after "convicted," insert "on indictment."

This Amendment is designed to meet a contention which was advanced by a number of hon. Members in Committee. I was not at the time convinced of the justice of the arguments adduced, but on reconsideration I think there is more in the arguments than appeared at the time. What it does is this. Clause 73 provides that orders can be made preventing people from taking part in the management of a company. Subsection (1, a) lays down that an order of that sort can be made if a person is convicted of an offence in relation to the formation of a company. It was urged that that ought to be limited to convictions on indictment, as the provision was far too wide. We feel on further consideration that the reasons urged in support of that point of view ought to be given effect to. This Amendment would limit convictions which may give rise to such an order, to convictions made on indictment.

Amendment agreed to.

I beg to move, in page 27, line 8, to leave out Subsection (3) and to insert:

"(3) A person intending to apply for the making of an order under this section by the court having jurisdiction to wind up a company shall give not less than ten days notice of his intention to the person against whom the order is sought, and on the hearing of the application the last mentioned person may appear and himself give evidence or call witnesses
This Amendment deals with a not dissimilar point designed to give effect to a promise I made to reconsider a succeeding condition of this Clause. The Clause as it stands makes it possible for orders to be made against persons preventing them from taking part in the management of a company for certain periods, and if members would remind themselves of the concluding words of Subsection (5), they will see that the order can be made against a person defined as a person in accordance with the directions or instructions the directors of a company have been accustomed to accept. A person of that sort may not be a member of the company at all, and in those circumstances it is unsatisfactory that an order should be made against such a person when he may not even know that it is being applied against him, and in circumstances in which he can have no appeal against the Order. We have sought to provide that a person desiring to appeal for the making of an order must make the person against whom he seeks to bring the order a party to the proceedings. The result would be not only that such a person would know perfectly well that an order was being asked for, but under the Supreme Court of Judicature Act, 1925, the effect would be that he would have a right to appeal against the making of that order. This is perfectly fair and does safeguard the position of a person who in those circumstances finds himself not in a position to appeal against it.

Amendment agreed to.

I beg to move, in page 27, line 29, to leave out from the beginning, to the end of line 32.

I am very grateful to the Government for carrying out all the undertakings they gave us in Committee, and they have been so perfectly and sweetly reasonable that they can be forgiven for overlooking one of the promises made to us by the Solicitor-General on 1st July. The right hon. Member for West Bristol (Mr. Stanley) and I objected to the use of the word "officer." We thought it was a superfluous word and asked the Solicitor-General to define what was meant by it, and I think he shared our confusion at the introduction of this unnecessary word. He promised to look into it and, if necessary, later on to move an Amendment. I am not complaining that the Government have not done this, but I see no reason why they should not do it now and take out of the Bill one word which is superfluous. I "hope the right hon. Gentleman will be able to meet us in fulfilment of the promise which he made.

We have carefully considered this Amendment, and we feel that in some ways the Bill would be incomplete without the provision which it seeks to omit. As I explained during the Committee stage, these words were nominally to deal with the person who could appoint what I loosely described as "nominee directors" or people who would act at the beck and call of the person appointing them. This definition was in the Companies Act, 1929, and I feel that circumstances might well arise in which it would be eminently desirable, in the interests of clean business, that a person not a member of a company, or a director of it, but who had guided it through undesirable proceedings, should have, an order made against him. If the Amendment were made, it would truncate the Clause, and I hope that the right hon. Gentleman will not press it.

In view of the explanation just given, which clears up the point of terminology of which I have spoken, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.