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Company Law Reform Bill

I am grateful to the noble Lord. As he said, I have already dealt with the distinction between existing and proposed transactions, which leads to a different scheme in the Bill. As regards why the remedies are different, in particular as regards breach of Clause 165, that is the only consequence of breach of Clause 165—because one is here concerned with an existing transaction or arrangement, the failure to declare cannot affect the validity of the transaction or give rise to any other civil consequences. That is to be contrasted with the position where there is a failure to disclose an interest in relation to a proposed transaction where the law can say that as a result of the failure to disclose that interest—and the company then enters into the transaction in ignorance of that—consequences can follow. The transaction may be voidable, to be set aside. The company may wish to claim financial redress in one form or another as a result of what has taken place. But, as I say, that is different from a failure to declare an interest in an existing transaction where those considerations probably cannot arise. That is why a criminal offence is created.