Insolvency Bill [H.L.] - continued        House of Lords
Disqualification of company directors etc. - continued

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Disqualification undertakings.     6. - (1) The Company Directors Disqualification Act 1986 is amended in accordance with this section.
 
      (2) After section 1 there is inserted-
 
 
"Disqualification undertakings: general.     1A. - (1) In the circumstances specified in sections 7 and 8 the Secretary of State may accept a disqualification undertaking, that is to say an undertaking by any person that, for a period specified in the undertaking, the person-
 
    (a) will not be a director of a company, act as receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has the leave of a court, and
 
    (b) will not act as an insolvency practitioner.
      (2) The maximum period which may be specified in a disqualification undertaking is 15 years; and the minimum period which may be specified in a disqualification undertaking under section 7 is two years.
 
      (3) Where a disqualification undertaking by a person who is already subject to such an undertaking or to a disqualification order is accepted, the periods specified in those undertakings or (as the case may be) the undertaking and the order shall run concurrently.
 
      (4) In determining whether to accept a disqualification undertaking by any person, the Secretary of State may take account of matters other than criminal convictions, notwithstanding that the person may be criminally liable in respect of those matters."
 
      (3) In section 7 (applications to court under section 6; reporting provisions), after subsection (2) there is inserted-
 
 
    "(2A) If it appears to the Secretary of State that the conditions mentioned in section 6(1) are satisfied as respects any person who has offered to give him a disqualification undertaking, he may accept the undertaking if it appears to him that it is expedient in the public interest that he should do so (instead of applying, or proceeding with an application, for a disqualification order)."
 
      (4) In section 8 (disqualification after investigation of company), after subsection (2) there is inserted-
 
 
    "(2A) Where it appears to the Secretary of State from such report, information or documents that, in the case of a person who has offered to give him a disqualification undertaking-
 
 
    (a) the conduct of the person in relation to a company of which the person is or has been a director or shadow director makes him unfit to be concerned in the management of a company, and
 
    (b) it is expedient in the public interest that he should accept the undertaking (instead of applying, or proceeding with an application, for a disqualification order),
  he may accept the undertaking."
 
      (5) After that section there is inserted-
 
 
"Variation etc. of disqualification undertaking.     8A. - (1) The court may, on the application of a person who is subject to a disqualification undertaking-
 
    (a) reduce the period for which the undertaking is to be in force, or
 
    (b) provide for it to cease to be in force.
      (2) On the hearing of an application under subsection (1), the Secretary of State shall appear and call the attention of the court to any matters which seem to him to be relevant, and may himself give evidence or call witnesses.
 
      (3) In this section "the court" has the same meaning as in section 7(2) or (as the case may be) 8."
 
      (6) In section 9 (matters for determining unfitness of directors), after subsection (1) there is inserted-
 
 
    "(1A) In determining whether he may accept a disqualification undertaking from any person the Secretary of State shall, as respects the person's conduct as a director of any company concerned, have regard in particular-
 
 
    (a) to the matters mentioned in Part I of Schedule 1 to this Act, and
 
    (b) where the company has become insolvent, to the matters mentioned in Part II of that Schedule;
  and references in that Schedule to the director and the company are to be read accordingly."
 
Effect of Northern Irish disqualifications.     7. - (1) After section 12 of the Company Directors Disqualification Act 1986 there is inserted-
 
 
"Northern Irish disqualification orders.     12A. A person subject to a disqualification order under Part II of the Companies (Northern Ireland) Order 1989-
 
    (a) shall not be a director of a company, act as receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has the leave of the High Court of Northern Ireland, and
 
    (b) shall not act as an insolvency practitioner."
      (2) If provision is made in relation to Northern Ireland for undertakings corresponding to the disqualification undertakings provided for by section 6, the Secretary of State may by order made by statutory instrument make any modifications of the Company Directors Disqualification Act 1986, or any enactment amended by Part II of Schedule 4, which he considers necessary or expedient to give effect to those undertakings in relation to Great Britain.
 
      (3) A statutory instrument containing an order under this section is to be subject to annulment in pursuance of a resolution of either House of Parliament.
 
Amendments.     8. Schedule 4 (which makes minor and consequential amendments about the disqualification of company directors, etc.) is to have effect.
 
 
Miscellaneous
Investigation and prosecution of malpractice.     9. - (1) Section 218 of the Insolvency Act 1986 (prosecution of delinquent officers and members of company) is amended as follows.
 
      (2) In subsection (1), for "to the prosecuting authority" there is substituted-
 
 
    "(a) in the case of a winding up in England and Wales, to the Secretary of State, and
 
    (b) in the case of a winding up in Scotland, to the Lord Advocate".
      (3) Subsection (2) is omitted.
 
      (4) In subsection (4)-
 
 
    (a) for the words from the beginning of paragraph (a) to "that authority" in paragraph (b) there is substituted "forthwith report the matter-
 
    (a) in the case of a winding up in England and Wales, to the Secretary of State, and
 
    (b) in the case of a winding up in Scotland, to the Lord Advocate,
  and shall furnish to the Secretary of State or (as the case may be) the Lord Advocate",
 
 
    (b) for "the authority" there is substituted "the Secretary of State or (as the case may be) the Lord Advocate".
      (5) For subsection (5) there is substituted-
 
 
    "(5) Where a report is made to the Secretary of State under subsection (4) he may, for the purpose of investigating the matter reported to him and such other matters relating to the affairs of the company as appear to him to require investigation, exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the Companies Act to investigate a company's affairs."
 
      (6) In subsection (6)(b), "to the prosecuting authority" is omitted.
 
      (7) In section 219 of that Act (obligations arising under section 218)-
 
 
    (a) in subsection (1), for "under section 218(5)" there is substituted "in consequence of a report made to him under section 218(4)" and for "that subsection" there is substituted "section 218(5)",
 
    (b) in subsection (3), for "the prosecuting authority" and "that authority" there is substituted "the Director of Public Prosecutions, the Lord Advocate",
 
    (c) in subsection (4), for "prosecuting authority" there is substituted "Director of Public Prosecutions, the Lord Advocate".
Restriction on use of answers obtained under compulsion.     10. In section 219 of the Insolvency Act 1986, after subsection (2) (answers given by a person pursuant to powers conferred by section 218 may be used in evidence against him) there is inserted-
 
 
    "(2A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies-
 
 
    (a) no evidence relating to the answer may be adduced, and
 
    (b) no question relating to it may be asked,
  by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
 
      (2B) Subsection (2A) applies to any offence other than-
 
 
    (a) an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath), or
 
    (b) an offence under section 44(1) or (2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath)."
Insolvent estates of deceased persons.     11. - (1) Section 421 of the Insolvency Act 1986 (power to apply provisions of Act to insolvent estates of deceased persons) is amended as follows.
 
      (2) In subsection (1), after "apply" there is inserted "in relation".
 
      (3) In subsection (4), for "this section" there is substituted "subsection (1)".
 
      (4) At the end of the section there is inserted-
 
 
    "(5) For the purpose of determining what is comprised in the insolvent estate of a deceased person where-
 
 
    (a) the provisions of this Act specified in an order under this section apply (by virtue of such an order) with or without modifications to the administration of the estate, and
 
    (b) on the day on which he died, he was beneficially entitled to a joint tenancy in any property,
  the deceased person is to be treated in relation to that property as if he had been adjudged bankrupt immediately before that day (so that his severable share is part of that estate)."
 
 
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