Select Committee on European Union Fortieth Report


PUBLIC LIMITED LIABILITY COMPANIES: MAINTENANCE AND ALTERATION OF THEIR CAPITAL (14197/04)

Letter from Gerry Sutcliffe MP, Minister for Employment Relations and Consumer Affairs, Department of Trade and Industry to the Chairman

  You cleared this proposal from scrutiny by letter on 16 December 2004[176] (progress of scrutiny, 27 December 2004, session 2004-05).

  I am writing to inform you that, at its meeting on 29 November, the Competitiveness Council agreed a general approach text in relation to this draft directive. The agreed text is in line with the negotiating objectives outlined in the letter accompanying the EM submitted last November. In particular, the text no longer includes the proposals to introduce general squeeze-out and sell-out provisions which we considered to be additional regulatory burdens.

  The proposal is currently being considered by the European Parliament and there remain reasonable prospects of political agreement being reached in the first few months of this year.

10 January 2006

Letter from Rt Hon Ian McCartney MP, Minister of State for Trade, Investment and Foreign Affairs, Department of Trade and Industry/Foreign and Commonwealth Office to the Chairman

  The House of Lords Select Committee on the European Union cleared EM 14197/04 by letter on 16 December (progress of scrutiny, 27 December 2004, session 2004-05).

  Further to my letter of 10 January 2006 (setting out details of the Competitiveness Council General Approach agreement reached on 29 November), I am now writing to inform you that the European Parliament voted on a text on 14 March which will enable a "first reading deal" on the dossier to be achieved between the Council and the European Parliament.

  The text agreed by the Parliament is in line with our negotiating objectives. It does not include the Commission's proposals to introduce general squeeze-out and sell-out provisions which we considered to be additional regulatory burdens. It also removes a Commission proposal which would have resulted in unlisted companies having to produce a written report when seeking to disapply pre-emption rights in relation to an increase in capital up to the limit of authorised share capital (where a public company proposes to issue new shares, existing shareholders have the right to be offered on a pro-rata basis part new shares before they may be offered to a third party). This too would have constituted an additional regulatory burden. Overall, the amendments to the Directive are unlikely to be of significant benefit to UK companies but with the potential added regulatory burdens now removed, they are unlikely to be harmful. Moreover, as most of the amendments are Member State options, we will be able to retain our current arrangements if our consultation on implementation of the directive indicates that this is the preferred course of action.

  The directive is likely to be adopted without discussion at a Council meeting late summer/early autumn 2006.

31 May 2006

Letter from the Chairman to Rt Hon Ian McCartney MP

  Thank you for your letter of 31 May which was considered by Sub-Committee E (Law and Institutions) at its meeting on 21 June. We were interested to learn of the removal of a number of measures which might have constituted additional regulatory burdens (for example the squeeze-out and sell-out provisions). We note that a "first reading deal" has now been achieved between the Council and the European Parliament.

22 June 2006

Letter from Malcolm Wicks MP, Minister for Energy, Department of Trade and Industry to the Chairman

  The House of Lords Select Committee on the European Union cleared EM 14197/04 by letter on 16 December 2004 (Progress of Scrutiny, 27 December 2004, Session 2004-05).

  There has been a further exchange of correspondence on the proposal (letter from Ian McCartney dated 31 May and your reply of 22 June 2006) concerning developments to achieve a First Reading Deal on this dossier.

  I am now writing to confirm that the proposal was agreed at the Agriculture Council on 24 July. There have been no further changes of substance since the previous exchange with the Committee—the dossier has simply undergone the necessary agreement of all language texts.

  The UK will, therefore have until around early 2008 to implement the Directive (the exact date will depend on the publication of the Directive in the Official Journal). We have begun considering in detail the implementing measures and will, of course, be happy to supply to the Committee a copy of the public consultation document in that respect in due course.

16 August 2006



176   Correspondence with Ministers, 4th Report of Session 2005-06, HL Paper 16, p 274. Back


 
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