Company Law Reform Bill [HL]

moved Amendment No. 320A:"Page 236, line 30, at end insert—" ““(   )   The notice of the resolution must state the reasons for the proposed removal of the auditor from office.”” The noble Baroness said: I shall not take long on this probing amendment, which adds a new subsection to the clause. I have tabled the amendment for two reasons. The first is to ensure a proper flow of information between members about the removal of the auditor. This is necessary to enable the members to consider the issue properly and the auditor to judge the context in which his representations, if any, should be made. That would ensure that the real reasons were given for removal, which would act as a break on managers if they were seeking to rid themselves of an auditor for the wrong reasons. The second reason that I have tabled the amendment relates to part 1 of Article 36 of the eighth directive, which states that divergence of opinion on accounting treatments or audit procedures should not be a ground for dismissal. As I understand it, the Bill seeks to implement part 2 of Article 36, but does not seem to do so for part 1. Therefore, my amendment is also a vehicle for asking the Government what are their intentions in relation to part 1 and why they have chosen not to implement part 1 by way of this Bill. I beg to move.