asked the Secretary of State for Trade and Industry on what date his Department first took action to call in the police to investigate the affairs of Mesco Laboratories Limited of Old Broad Street, the Stanley Weston Group, Renclore Limited, Mesco Consolidated Industries Finances Limited, Hestmore Limited, Mesco Properties Limited, and Corton Beach (Holdings) Limited; and with what results.
Inspectors were appointed under Section 165(b) of the Companies Act, 1948, to investigate the affairs of Corton Beach Holdings Ltd., on 28th April, 1970, following the receipt of information from the Metropolitan and City Police, Company Fraud Department, and from other sources. The same inspectors were appointed to investigate Mesco Consolidated Industries Finance Ltd., on 8th September, 1970, and Renclore Ltd., on 30th June, 1971. A compulsory winding-up order was made in the High Court against Mesco Laboratories Ltd. on 15th December, 1970, and a similar order was made on 21st December against Mesco Properties Ltd.
I expect to receive a report from the inspectors on Corton Beach Holdings Ltd. during the course of the next two months.
I congratulate the Minister on taking action in these cases but is he not aware that, generally speaking, it takes years for his Department to take action when Members of Parliament, directors, auditors, accountants and solicitors ask him to take action? Will he look at yesterday's Observer, in which evidence is given that 200,000 out of 500,000 limited liability companies are consistently and persistently breaking the law and his Department is doing nothing at all about it? Will he not get cracking and get action going on this matter before these companies rob the investors of their money?
I am delighted to know that at last the hon. Gentleman has recognised the sterling achievements of the Companies Branch of my Department. There is, however, one litle difficulty to be overcome before taking a firm to court, which is that one must have a case which can be sustained in court. Some of the cases which the hon. Gentleman has put forward cannot be said to comply with that condition.
On the question of breach of the law in terms of returning accounts, I know that in most cases this is not a very serious offence but behind a great deal of mass negligence lies a good deal of deliberate fraud. Why cannot the Department make sure that this law is obeyed, as most of our laws are obeyed, by starting to prosecute people who fail to make returns in accordance with the Act?
The right hon. Gentleman's supplementary question is about a separate aspect of company law from that referred to in the Question but I can say that we prosecute in a large number of cases and that the sentence sometimes is inadequate to deter offenders. This is a problem which the Government are looking into.