Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I move amendment No. 1:

In page 13, line 20, after "2014;" to insert "to amend section 459 of the Companies Act 2014;".

Deputies will recall that I indicated on both Second and Committee Stages that I would be bringing forward amendments to section 459 of the Companies Act 2014, which I am now doing. The purpose of amendment No. 1 is to change the Long Title of the Bill to make reference to the 2014 Act, given that I am seeking to amend section 459 of the Act.

Amendment No. 49 makes amendments to section 459 that are technical and operational in nature. They set out a process for dealing with unclaimed considerations of former dissenting shareholders in respect of an acquisition. The purpose of this process is to remove any potential exposure of the State to financial risks arising from the indemnity currently provided by the Minister for Public Expenditure and Reform, provide for adequate legal examination and oversight of unclaimed considerations, and provide for efficient operation of unclaimed considerations and ensure a person so entitled can make a claim at any time.

In a takeover, it is the objective of the person or company making the bid, known as the offeror under the Companies Act 2014, to ensure 100% ownership is achieved. Under the 2014 Act, once the offeror has acceptances that meet the threshold of affected shares, the offeror may proceed to acquire the shares of the dissenting minority shareholders of the target company, which is known as the offeree company. Section 459(7) of the Act provides for the completion of the compulsory acquisition. This includes the offeree company holding for seven years any moneys or non-cash assets such as shares or property received by it on trust for the former dissenting shareholders, who, for example, may not be contactable.

Section 459(7)(c), which matured on 1 June 2022, provides that after seven years, any unclaimed consideration is then transferred by the offeree company to the Minister for Public Expenditure and Reform, who indemnifies the offeree company for the amount transferred against any future claims. The Department of Public Expenditure and Reform has identified financial risks arising from this indemnity. Thus, the provision is being amended to minimise the State's exposure to financial risk and provide for adequate legal examination and oversight. The amendments are based on section 623 of the Companies Act 2014, which provides for the court-operated companies liquidations account into which unclaimed dividends and balances are paid in a winding-up and which, after seven years, are transferred to the Exchequer.

I will now outline the amendments to section 459 of the Companies Act. Section 173(a) of the Consumer Rights Bill, as provided for in amendment No. 49, substitutes subsection (7)(c) of section 459 to provide that at the expiry of seven years, the offeree company must lodge unclaimed considerations to the court account nominated by the Minister for Public Expenditure and Reform. As the court can only accept cash, the offeree company must realise the non-cash assets such as shares or property it has held on trust as soon as practically possible and lodge the proceeds of the sale to the nominated court account.

Section 173(b) of the Bill, as provided for in amendment No. 49, inserts new subsections (9) to (16), inclusive, in section 459. Subsection (9) provides that where the offeree company cannot realise the non-cash assets, it must continue to hold them on trust until such time as they are either claimed or realised, following which the proceeds must be lodged with the nominated court account. Subsection (10) provides that a person entitled to the moneys in the court account can apply to the court to make a claim. Subsection (11) provides that after seven years in the court account, the unclaimed moneys are lodged with the Exchequer. Under subsection (12), a person can apply to the court to make a claim on those moneys. Where the court is satisfied the person concerned is so entitled, it can order the Minister for Public Expenditure and Reform to provide the payment. Subsection (13) is a transitional provision that provides for the treatment of a consideration that may transfer from the offeree company to the Minister for Public Expenditure and Reform under the current subsection (7)(c) before the commencement of this new process. Subsection (14) provides that a person making a claim on moneys arising from processes in the transitional period will also apply to the court. Under subsection (15), no liability will attach to the Minister for Public Expenditure and Reform in respect of the actions or omissions of the offeree company concerning the unclaimed consideration. Subsection (16) clarifies references to subsection (7)(c).

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