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Furness Withy (Eurocanadian Holding)

Volume 976: debated on Friday 21 December 1979

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asked the Secretary of State for Trade whether he is satisfied that the proposal of Mr. Narby of Eurocanadian to transfer from Eurocanadian shares in Furness Withy to a company owned by himself and his family, which itself owns the majority of the shares of Eurocanadian, will comply with the order of the Office of Fair Trading in 1976 that the Eurocanadian holding in Furness Withy should be reduced to 10 per cent. by December.

[pursuant to her reply,4 December 1979, c. 176–77]: My right hon. Friend has decided on the action to be taken following the information I received on 16 November 1979 from Eurocanadian Shipholdings Ltd. (ECS) that its total shareholding in Furness Withy was being transferred to the three ECS shareholders, Dolphin Investments Ltd., Helix Investments Ltd., and Canadian National Railways.Following the report in 1976 of the Monopolies and Mergers Commission into the merger between ECS and Furness Withy, ECS gave the then Secretary of State for Prices and Consumer Protection an undertaking that it would within three years—that is before 28 December 1979—reduce its holding in Furness Withy to not more than 10 per cent. of the issued ordinary share capital of Furness Withy. The ECS shareholders between them still hold 18·4 per cent. of the Furness Withy share capital.The Director General of Fair Trading has advised under section 88 of the Fair Trading Act 1973 that he has concluded that the transfer of shares does not bring the merger (between ECS and Furness Withy) to an end and that he does not consider that the intention of the undertaking has been fulfilled. He has therefore recommended that my right hon. Friend should make an order to remove the adverse effects to the public interest found by the Commission, and that Dolphin, Helix and Canadian National Railways should be told that the transaction did not fulfil the intention of the undertaking.I agree with the Director General. My right hon. Friend therefore intends to prepare an order to remedy the adverse effects found by the Commission (principally, ECS representation on the board of Furness Withy). An order would be brought forward if it became clear that the ECS shareholders were attempting to obtain such representation. The order would be designed to ensure that the voting rights of these shareholders could not be used for this purpose. The ECS shareholders and Furness Withy are being informed of my right hon. Friend's decision.