Companies (Share Capital and Acquisition by Company of its Own Shares) Regulations 2009

I thank the Minister for introducing the regulations, which seem to contain rather a jumble of consequential changes in the law with regard to company shares and their creditors. I defer to the noble Lord, Lord Razzall, who is the only noble Lord present who was fully involved in debates on the Bill and who may be able to shed some more light on this. However, I shall make a few observations and ask a few questions. These are subjects with which I have some rather dated familiarity. I am a chartered accountant and, among other things, I practised in the insolvency area in the late 1970s and early 1980s and, subsequently, through the 1980s and 1990s I advised companies as an investment banker in, among other things, raising money in rights issues. So, first, as regards the reduction in the minimum period during which a rights issue may be left open, am I right in thinking that this does not affect the maximum period for which it may be left open? I do not think that there is a maximum period. Assuming that that is correct, and although I do not particularly object to what is being done here, I think that the Government’s complaint seems to have been directed primarily at the longer rights issues, such as those of HBOS and Bradford & Bingley. I cannot quite see how this move will improve things, and I suspect that this whole area is a bit more complicated than the Government think it is, but I very much look forward to hearing what the Minister has to say about it and indeed to seeing what difference it makes in practice. My next comment concerns the moves as regards the rights of creditors to object to a reduction in a company’s share capital. Am I right in deducing that it limits creditors’ rights—that is, compared with what those rights are now? I understand that this is being done under an EU directive but I have to ask whether the Government really think it wise in the current conditions. Also, when exactly are, for example, France and Germany adopting this directive, or have they done so already? As regards the length of time for which a company may maintain an extant right to buy in its own shares, I do not particularly object to increasing the period to five years. As regards removing the cap on the proportion of its share capital that a company may hold in treasury, I think I am right in saying that the position that we are moving to is the one that has operated in the US for many years. However, I wonder whether the Government have fully thought through the extent to which this risks increasing the opportunities for a company to manipulate its share price. Perhaps the Minister can say what the Government’s thought process has been on this. I hope that he can reassure me. Lastly, I should also be grateful to hear—perhaps in writing afterwards if that is easier—what the position is as regards the period and the percentage in the other major EU countries.