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| Companies Act 1989 |
| 1989 c. 40 - continued
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| Companies Act Index |
Part III |
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Investigations and Powers to Obtain Information |
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Amendments of the Companies Act 1985
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Investigations
by inspectors not leading to published report.
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55. In
section 432 of the [1985 c. 6.] Companies Act 1985 (appointment
of inspectors by Secretary of State), after subsection (2) (investigation
of circumstances suggesting misconduct) insert
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"(2A) Inspectors may be appointed under subsection
(2) on terms that any report they may make is not for publication;
and in such a case, the provisions of section 437(3) (availability
and publication of inspectors' reports) do not apply." |
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"(2) If the inspectors consider that an officer
or agent of the company or other body corporate, or any other
person, is or may be in possession of information relating
to a matter which they believe to be relevant to the investigation,
they may require him
(a) to produce to them any documents in his custody
or power relating to that matter,
(b) to attend before them, and
(c) otherwise to give them all assistance in
connection with the investigation which he is reasonably
able to give;
and it is that person's duty to comply with the requirement." |
.(4) For subsection (3) (power to examine on oath) substitute
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"(3) An inspector may for the purposes of the
investigation examine any person on oath, and may administer
an oath accordingly." |
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(5) After subsection (5) insert
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"(6) In this section "documents" includes
information recorded in any form; and, in relation to information
recorded otherwise than in legible form, the power to require
its production includes power to require the production of
a copy of the information in legible form." |
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(6) In section 436 of the [1985
c. 6.] Companies Act 1985 (obstruction of inspectors treated
as contempt of court), for subsections (1) and (2) substitute
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"(1) If any person
(a) fails to comply with section 434(1)(a) or
(c),
(b) refuses to comply with a requirement under
section 434(1)(b) or (2), or
(c) refuses to answer any question put to him
by the inspectors for the purposes of the investigation,
the inspectors may certify that fact in writing to the court." |
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Duty of inspectors
to report.
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57. In
section 437 of the Companies Act 1985 (inspectors' reports), after
subsection (1A) insert
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"(1B) If it appears to the Secretary of State
that matters have come to light in the course of the inspectors'
investigation which suggest that a criminal offence has been
committed, and those matters have been referred to the appropriate
prosecuting authority, he may direct the inspectors to take
no further steps in the investigation or to take only such
further steps as are specified in the direction. |
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(1C) Where an investigation is the subject of a direction
under subsection (1B), the inspectors shall make a final report
to the Secretary of State only where
(a) they were appointed under section 432(1)
(appointment in pursuance of an order of the court), or
(b) the Secretary of State directs them to do
so.
" |
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Power to bring
civil proceedings on the company's behalf.
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58. In
section 438 of the Companies Act 1985 (power to bring civil proceedings
on the company's behalf), for the opening words of subsection (1)
down to "it appears to the Secretary of State" substitute
"If from any report made or information obtained under this Part
it appears to the Secretary of State". |
Expenses of investigating
a company's affairs.
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59.(1) Section
439 of the Companies Act 1985 (expenses of investigating a company's
affairs) is amended as follows.
(2) For subsection (1) substitute
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"(1) The expenses of an investigation under any
of the powers conferred by this Part shall be defrayed in
the first instance by the Secretary of State, but he may recover
those expenses from the persons liable in accordance with
this section.
There shall be treated as expenses of the investigation,
in particular, such reasonable sums as the Secretary of
State may determine in respect of general staff costs and
overheads.
" |
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(3) In subsection (4) for "the
inspectors' report" substitute "an inspectors' report".
(4) For subsection (5) substitute
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"(5) Where inspectors were appointed
(a) under section 431, or
(b) on an application under section 442(3),
the applicant or applicants for the investigation is or are
liable to such extent (if any) as the Secretary of State may
direct." |
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Power of Secretary
of State to present winding-up petition.
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60.(1) Section
440 of the [1985 c. 6.] Companies Act 1985 (power of Secretary
of State to present winding-up petition) is repealed; but the following
amendments have the effect of re-enacting that provision, with modifications.
(2) In section 124(4) of the [1986
c. 45.] Insolvency Act 1986 (application by Secretary of
State for company to be wound up by the court), for paragraph (b)
substitute
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" (b) in a case falling within section 124A
below." |
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(3) After that section insert
"Petition for winding
up on grounds of public interest.
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124A. (1) Where
it appears to the Secretary of State from
(a) any report made or information obtained under
Part XIV of the Companies Act 1985 (company investigations,
&c.),
(b) any report made under section 94 or 177 of
the Financial Services Act 1986 or any information obtained
under section 105 of that Act,
(c) any information obtained under section 2
of the Criminal Justice Act 1987 or section 52 of the Criminal
Justice (Scotland) Act 1987 (fraud investigations), or
(d) any information obtained under section 83
of the Companies Act 1989 (powers exercisable for purpose
of assisting overseas regulatory authorities),
that it is expedient in the public interest that a company
should be wound up, he may present a petition for it to be
wound up if the court thinks it just and equitable for it
to be so.
(2) This section does not
apply if the company is already being wound up by the court.
" |
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Inspectors' reports
as evidence.
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61. In
section 441 of the Companies Act 1985 (inspectors' reports to be evidence),
in subsection (1) for "sections 431 or 432" substitute "this
Part". |
Investigation of
company ownership.
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62. In
section 442 of the Companies Act 1985 (power to investigate company
ownership), for subsection (3) (investigation on application by members
of company) substitute
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"(3) If an application for investigation under
this section with respect to particular shares or debentures
of a company is made to the Secretary of State by members
of the company, and the number of applicants or the amount
of shares held by them is not less than that required for
an application for the appointment of inspectors under section
431(2)(a) or (b), then, subject to the following provisions,
the Secretary of State shall appoint inspectors to conduct
the investigation applied for. |
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(3A) The Secretary of State shall not appoint inspectors
if he is satisfied that the application is vexatious; and
where inspectors are appointed their terms of appointment
shall exclude any matter in so far as the Secretary of State
is satisfied that it is unreasonable for it to be investigated. |
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(3B) The Secretary of State may, before appointing
inspectors, require the applicant or applicants to give security,
to an amount not exceeding £5,000, or such other sum
as he may by order specify, for payment of the costs of the
investigation.
An order under this subsection shall be made by statutory
instrument which shall be subject to annulment in pursuance
of a resolution of either House of Parliament. |
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(3C) If on an application under subsection (3) it appears
to the Secretary of State that the powers conferred by section
444 are sufficient for the purposes of investigating the matters
which inspectors would be appointed to investigate, he may
instead conduct the investigation under that section." |
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Secretary of State's
power to require production of documents.
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63.(1) Section
447 of the [1985 c. 6.] Companies Act 1985 (power of Secretary
of State to require production of documents) is amended as follows.
(2) Omit subsection (1) (bodies in
relation to which powers exercisable), and
(a) in subsections (2) and (3) for "any such body"
substitute "a company",
(b) in subsections (4) and (5) for "any body"
and "a body" substitute "a company", and
(c) in subsections (5) and (6) for "the body"
substitute "the company".
(3) For "books or papers",
wherever occurring, substitute "documents".
(4) In subsection (3) (power to authorise
officer to require production of documents) after "an officer
of his" insert "or any other competent person", after
"the officer" in the first place where it occurs insert
"or other person" and for "the officer" in the
second place where it occurs substitute "he (the officer or
other person)".
(5) In subsection (4) (power to require
production of documents in possession of third party) after "an
officer of his" and after "the officer" (twice) insert
"or other person".
(6) In subsection (6), for the second
sentence substitute
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"Sections 732 (restriction on prosecutions), 733 (liability
of individuals for corporate default) and 734 (criminal proceedings
against unincorporated bodies) apply to this offence." |
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(7) After subsection (8) insert
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"(9) In this section "documents" includes
information recorded in any form; and, in relation to information
recorded otherwise than in legible form, the power to require
its production includes power to require the production of
a copy of it in legible form." |
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(8) In Schedule 24 to the [1985
c. 6.] Companies Act 1985 (punishment of offences), in
the entry relating to section 447(6), for "books and papers"
substitute "documents". |
Entry and search
of premises.
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64.(1) For
section 448 of the Companies Act 1985 (entry and search of premises)
substitute
"Entry and search of
premises.
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448. (1) A
justice of the peace may issue a warrant under this section
if satisfied on information on oath given by or on behalf
of the Secretary of State, or by a person appointed or authorised
to exercise powers under this Part, that there are reasonable
grounds for believing that there are on any premises documents
whose production has been required under this Part and which
have not been produced in compliance with the requirement.
(2) A justice of the peace
may also issue a warrant under this section if satisfied
on information on oath given by or on behalf of the Secretary
of State, or by a person appointed or authorised to exercise
powers under this Part
(a) that there are reasonable grounds for believing
that an offence has been committed for which the penalty
on conviction on indictment is imprisonment for a term of
not less than two years and that there are on any premises
documents relating to whether the offence has been committed,
(b) that the Secretary of State, or the person
so appointed or authorised, has power to require the production
of the documents under this Part, and
(c) that there are reasonable grounds for believing
that if production was so required the documents would not
be produced but would be removed from the premises, hidden,
tampered with or destroyed.
(3) A warrant under this
section shall authorise a constable, together with any other
person named in it and any other constables
(a) to enter the premises specified in the information,
using such force as is reasonably necessary for the purpose;
(b) to search the premises and take possession
of any documents appearing to be such documents as are mentioned
in subsection (1) or (2), as the case may be, or to take,
in relation to any such documents, any other steps which
may appear to be necessary for preserving them or preventing
interference with them;
(c) to take copies of any such documents; and
(d) to require any person named in the warrant
to provide an explanation of them or to state where they
may be found.
(4) If in the case of a warrant
under subsection (2) the justice of the peace is satisfied
on information on oath that there are reasonable grounds
for believing that there are also on the premises other
documents relevant to the investigation, the warrant shall
also authorise the actions mentioned in subsection (3) to
be taken in relation to such documents.
(5) A warrant under this
section shall continue in force until the end of the period
of one month beginning with the day on which it is issued.
(6) Any documents of which
possession is taken under this section may be retained
(a) for a period of three months; or
(b) if within that period proceedings to which
the documents are relevant are commenced against any person
for any criminal offence, until the conclusion of those
proceedings.
(7) Any person who intentionally
obstructs the exercise of any rights conferred by a warrant
issued under this section or fails without reasonable excuse
to comply with any requirement imposed in accordance with
subsection (3)(d) is guilty of an offence and liable to
a fine.
Sections 732 (restriction on prosecutions), 733 (liability
of individuals for corporate default) and 734 (criminal
proceedings against unincorporated bodies) apply to this
offence.
(8) For the purposes of sections
449 and 451A (provision for security of information) documents
obtained under this section shall be treated as if they
had been obtained under the provision of this Part under
which their production was or, as the case may be, could
have been required.
(9) In the application of
this section to Scotland for the references to a justice
of the peace substitute references to a justice of the peace
or a sheriff, and for the references to information on oath
substitute references to evidence on oath.
(10) In this section "document"
includes information recorded in any form.
" |
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(2) In Schedule 24 to the [1985
c. 6.] Companies Act 1985 (punishment of offences), in
the entry relating to section 448(5)
(a) in the first column for "448(5)" substitute
"448(7)", and
(b) for the entry in the second column substitute
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"Obstructing the exercise of any rights conferred
by a warrant or failing to comply with a requirement imposed
under subsection (3)(d)." |
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Provision for security
of information obtained.
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65.(1) Section
449 of the [1985 c. 6.] Companies Act 1985 (provision
for security of information obtained) is amended as follows.
(2) In subsection (1) (purposes for
which disclosure permitted)
(a) in the opening words for "body" (twice)
substitute "company"
(b) for paragraph (c) substitute
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" (c) for the purposes of enabling or assisting
any inspector appointed under this Part, or under section
94 or 177 of the Financial Services Act 1986, to discharge
his functions;" |
;
(c) after that paragraph insert
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" (cc) for the purpose of enabling or assisting
any person authorised to exercise powers under section 44
of the Insurance Companies Act 1982, section 447 of this
Act, section 106 of the Financial Services Act 1986 or section
84 of the Companies Act 1989 to discharge his functions;" |
;
(d) in paragraph (d) for "or the Financial Services
Act 1986" substitute ", the Financial Services Act 1986
or Part II, III or VII of the Companies Act 1989,"
(f) in paragraph (h) for "(n) or (p)" substitute
"or (n)"
(g) after that paragraph insert
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" (hh) for the purpose of enabling or assisting
a body established by order under section 46 of the Companies
Act 1989 to discharge its functions under Part II of that
Act, or of enabling or assisting a recognised supervisory
or qualifying body within the meaning of that Part to discharge
its functions as such;" |
;
(h) after paragraph (l) insert
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" (ll) with a view to the institution of,
or otherwise for the purposes of, any disciplinary proceedings
relating to the discharge by a public servant of his duties;" |
;
(i) for paragraph (m) substitute
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" (m) for the purpose of enabling or assisting
an overseas regulatory authority to exercise its regulatory
functions." |
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(3) For subsection (1A) substitute
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"(1A) In subsection (1)
(a) in paragraph (ll) "public servant"
means an officer or servant of the Crown or of any public
or other authority for the time being designated for the
purposes of that paragraph by the Secretary of State by
order made by statutory instrument; and
(b) in paragraph (m) "overseas regulatory
authority" and "regulatory functions" have
the same meaning as in section 82 of the Companies Act 1989.
" |
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(4) In subsection (1B) (disclosure
to designated public authorities) for "designated for the purposes
of this section" substitute "designated for the purposes
of this subsection".
(5) In subsection (2), for the second
sentence substitute
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"Sections 732 (restriction on prosecutions), 733 (liability
of individuals for corporate default) and 734 (criminal proceedings
against unincorporated bodies) apply to this offence." |
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(6) For subsection (3) substitute
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"(3) For the purposes of this section each of
the following is a competent authority
(a) the Secretary of State,
(b) an inspector appointed under this Part or
under section 94 or 177 of the Financial Services Act 1986,
(c) any person authorised to exercise powers
under section 44 of the Insurance Companies Act 1982, section
447 of this Act, section 106 of the Financial Services Act
1986 or section 84 of the Companies Act 1989,
(d) the Department of Economic Development in
Northern Ireland,
(h) the Director of Public Prosecutions, and
the Director of Public Prosecutions for Northern Ireland,
(i) any designated agency or transferee body
within the meaning of the Financial Services Act 1986, and
any body administering a scheme under section 54 of or paragraph
18 of Schedule 11 to that Act (schemes for compensation
of investors),
(j) the Chief Registrar of friendly societies
and the Registrar of Friendly Societies for Northern Ireland,
(k) the Industrial Assurance Commissioner and
the Industrial Assurance Commissioner for Northern Ireland,
(m) any procurator fiscal. |
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(3A) Any information which may by virtue of this section
be disclosed to a competent authority may be disclosed to
any officer or servant of the authority." |
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(7) In subsection (4) (orders) for
"subsection (1B)" substitute "subsection (1A)(a)
or (1B)". |
Punishment for
destroying, mutilating, &c. company documents.
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66.(1) Section
450 of the [1985 c. 6.] Companies Act 1985 (punishment
for destroying, mutilating, &c. company documents) is amended
as follows.
(2) In subsection (1) for the opening
words down to "insurance company" substitute "An
officer of a company, or of an insurance company", for "body's"
substitute "company's" and for "the body" substitute
"the company".
(3) For subsection (4) substitute
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"(4) Sections 732 (restriction on prosecutions),
733 (liability of individuals for corporate default) and 734
(criminal proceedings against unincorporated bodies) apply
to an offence under this section." |
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(4) After that subsection insert
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"(5) In this section "document" includes
information recorded in any form." |
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Punishment for
furnishing false information.
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67. In
section 451 of the [1985 c. 6.] Companies Act 1985 (punishment
for furnishing false information), for the second sentence substitute
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"Sections 732 (restriction on prosecutions), 733 (liability
of individuals for corporate default) and 734 (criminal proceedings
against unincorporated bodies) apply to this offence." |
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Disclosure of information
by Secretary of State or inspector.
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68. For
section 451A of the Companies Act 1985 (disclosure of information
by the Secretary of State) substitute
"Disclosure of information
by Secretary of State or inspector.
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451A. (1) This
section applies to information obtained under sections 434
to 446.
(2) The Secretary of State
may, if he thinks fit
(a) disclose any information to which this section
applies to any person to whom, or for any purpose for which,
disclosure is permitted under section 449, or
(b) authorise or require an inspector appointed
under this Part to disclose such information to any such
person or for any such purpose.
(3) Information to which
this section applies may also be disclosed by an inspector
appointed under this Part to
(a) another inspector appointed under this Part
or an inspector appointed under section 94 or 177 of the
Financial Services Act 1986, or
(b) a person authorised to exercise powers under
section 44 of the Insurance Companies Act 1982, section
447 of this Act, section 106 of the Financial Services Act
1986 or section 84 of the Companies Act 1989.
(4) Any information which
may by virtue of subsection (3) be disclosed to any person
may be disclosed to any officer or servant of that person.
(5) The Secretary of State
may, if he thinks fit, disclose any information obtained
under section 444 to
(a) the company whose ownership was the subject
of the investigation,
(b) any member of the company,
(c) any person whose conduct was investigated
in the course of the investigation,
(d) the auditors of the company, or
(e) any person whose financial interests appear
to the Secretary of State to be affected by matters covered
by the investigation.
" |
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Protection of banking
information.
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69.(1) Section
452 of the [1985 c. 6.] Companies Act 1985 (privileged
information) is amended as follows.
(2) In subsection (1), omit paragraph
(b) (disclosure by bankers of information relating to their customers).
(3) After that subsection insert
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"(1A) Nothing in section 434, 443 or 446 requires
a person (except as mentioned in subsection (1B) below) to
disclose information or produce documents in respect of which
he owes an obligation of confidence by virtue of carrying
on the business of banking unless
(a) the person to whom the obligation of confidence
is owed is the company or other body corporate under investigation,
(b) the person to whom the obligation of confidence
is owed consents to the disclosure or production, or
(c) the making of the requirement is authorised
by the Secretary of State. |
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(1B) Subsection (1A) does not apply where the person
owing the obligation of confidence is the company or other
body corporate under investigation under section 431, 432
or 433." |
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(4) In subsection (3) after "officer
of his" insert "or other person". |
Investigation of
oversea companies.
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70. In
section 453 of the Companies Act 1985 (investigation of oversea companies),
for subsection (1) substitute
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"(1) The provisions of this Part apply to bodies
corporate incorporated outside Great Britain which are carrying
on business in Great Britain, or have at any time carried
on business there, as they apply to companies under this Act;
but subject to the following exceptions, adaptations and modifications. |
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(1A) The following provisions do not apply to such
bodies
(a) section 431 (investigation on application
of company or its members),
(b) section 438 (power to bring civil proceedings
on the company's behalf),
(c) sections 442 to 445 (investigation of company
ownership and power to obtain information as to those interested
in shares, &c.), and
(d) section 446 (investigation of share dealings).
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(1B) The other provisions of this Part apply to such
bodies subject to such adaptations and modifications as may
be specified by regulations made by the Secretary of State." |
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Investigation of
unregistered companies.
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71. In
Schedule 22 to the Companies Act 1985 (provisions applying to unregistered
companies), for the entry relating to Part XIV substitute
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"Part XIV (except section 446) |
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Investigation of companies and their affairs; requisition
of documents. |
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| © Crown copyright 1989 |
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