Company Law Reform Bill [HL]

moved Amendment No. A9A:"Page 250, line 37, leave out paragraph (a) and insert—" ““(a)   being made only to persons who have been specifically selected to receive it, or”” The noble Lord said: This amendment concerns subsection (3) of Clause 526. We want to highlight another issue that has been brought to our attention by the City firm. The clause defines what is meant by an ““offer to the public”” so as to facilitate the interpretation of the prohibition of such offers by private companies contained in Clause 525. The intention of subsection (3)(a) appears to be to carve out of the prohibition offers to possibly large numbers of people who have been specifically identified by a company—perhaps a group of known or selected investors or business associates. I think that the Minister partly touched on this in his response to my previous amendment. The concern that has been put to us is that the drafting is now so wide that it risks rendering the principal prohibition ineffective. For example, it is argued to us that a specifically addressed mailshot to a large number of unknown people, not selected for any particular reason, would almost certainly be calculated to result in securities not becoming available to anyone other than them. Surely it is not the Government’s intention that such an action should be exempt from the prohibition, but that is one interpretation of the Bill as currently drafted. Our amendment is aimed to tighten up subsection (3)(a) so that only offers made to those,"““who have been specifically selected to receive it””—" that is, not by way of a blanket mailshot—would be exempt from the prohibition. I beg to move.