Company Law Reform Bill [HL]

As we have been discussing, subsection (3)(a) is an exemption for offers made only to particular persons. This is recognised by Amendment No. A9A, which would replace the paragraph with different words. However, the amendment does not recognise the further requirements that are imposed before the exemption can apply. It is not enough that the offer is made only to the particular persons receiving the offer; what matters is that the offer to the specifically selected persons should not be done with the aim of making the shares or debentures of the company available to other people. We believe that, rather than seek to narrow it as the noble Lord intends, the amendment would greatly widen the exemption, making it easier for a private company to evade the public offer prohibition and make its shares available to the public. For example, the specifically selected person might be a financial adviser, proposing to offer the shares to his clients specifically selected by him. I believe the current wording of subsection (3) is appropriate, and that that will satisfy the noble Lord. I do not believe we have changed the existing position. With regard to the mailshot and whether that would be covered, I struggle to see why Clause 526(3) would deal with that situation, because it is necessary to look at the persons who are receiving the offer and to prohibit it going beyond those persons. I do not think a mailshot to non-identified persons comes within that, although I am probably going to be corrected by the people behind me. The key, or otherwise, is in paragraph (b), which makes clear that the selected persons have to be of private concern.