230. Power to declare company or foreign company Flashcards
- Power to declare company or foreign company
General overview
[230.01] The Minister may declare that companies or foreign companies that commit unlawful acts or misfeasance, etc. should be investigated for the purpose of protection of the public or the shareholders or creditors of the company or foreign company. The rationale for Part IX of the Act is explained by Lord Denning MR as follows, “… sometimes public companies are conducted in a way which is beyond the control of the shareholders. Shareholders know little or are told little. They received glossy annual reports, which are often thrown into the waste basket. Few attend the AGM. The board controls the company to a large extent, and they are a self-perpetuating oligarchy that is virtually unaccountable. Seeing that the directors are the guardians of the company, the question is asked: Quis custodiet ipsos custodes? Who will guard the guards themselves?”: Norwest Holst Ltd v Department of Trade [1978] Ch 201; [1978] 3 All ER 280, CA .
