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Company Law Reform Bill [HL]

My Lords, the whole House will be grateful to the Minister for the amendments he has tabled. As he says, there is a delicate balance to be struck between shareholder democracy and shareholder tyranny. On these Benches we welcome these changes, which are clearly an important and worthwhile step in the right direction. Events involving GlaxoSmithKline have given them urgency. We have not yet had much time to study them or to think through their implications. That will probably be for debate in the other place, during Committee stage. We wonder whether further tightening up will be needed as consultation takes place. Three thoughts have occurred to us, which I offer to the Minister this afternoon. First, we have not heard the end of the issue of proper purpose and the definition thereof. If a company—particularly in the early months and years of the legislation without any court guidance on what the court thinks is proper or improper—has to go to the trouble and expense of going to court, there must be a risk that, because of the time, money and the risk to reputation of going to court and being turned down, it will be inclined to hand over the register rather than go through that hurdle. The ““not a proper purpose”” issue will have to be further probed as consultation takes place. The second question is whether the amendments prevent the chain request; that is where I persuade someone who is perfectly legitimate to use a legitimate purpose to get the register for someone else. Therefore, will there be a proper trace back to the person who is improper, even if the sequences in the chain are perfectly proper? The last thought is whether there is an alternative route that might provide a more effective way of preventing this situation in the Data Protection Act or equivalent legislation, which would achieve the purpose that we entirely share in a way that shuts off the issue more completely than it is possible to do in what is, after all, a company law reform Bill. Those are our thoughts, on which I hope the Minister may be able to give some preliminary comments. For the time being, from these Benches, we welcome the Government’s prompt attention to this important matter and entirely support the amendments.