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Company Law Reform Bill [HL]

moved Amendment No. A175:"Page 443, line 14, at end insert—" ““(6A)   Notwithstanding subsection (2), if by the end of six weeks from the date of a notice under section 429, the offeror has not been given notice of an application under section 430C, subsection (5) of section 430 shall have immediate effect, notwithstanding any application to the court under subsection (1) which is then pending.”” The noble Lord said: This amendment seeks to remove a loophole which we think has the potential to eliminate much of the benefit of other proposed amendments to Section 430C. Section 430C provides a mechanism for shareholders who have received a notice under Section 429 to apply to court to object to the compulsory acquisition. While such an application is outstanding, the compulsory acquisition cannot proceed. That has the potential of extending the period between the time of issue of a notice under Section 429 and the compulsory acquisition beyond the six weeks required by Section 429. The amendments to the section set out in the Bill require that a shareholder making an application under Section 430C must give notice of the application to the offeror. This is a welcome proposal as it removes the onerous obligation on the offeror to make inquiries of the companies court and all other district registries with chancery jurisdiction in order to find out whether any applications under Section 430C have been made. In practice, because the company will not know the name of any shareholder who may have made an application, it can be impossible to establish whether an application has been made. However, the current proposal does not positively state that, where no notices under Section 430C have been received within the statutory six-week period, the offeror can proceed with the compulsory acquisition. That lacuna should be filled. Without such a correction, the offeror will still need to make searches of the relevant courts and much of the benefit of the proposed amendments will be lost. I beg to move.