Mr JACOBI(5.55) —I wish to discuss two points. The first concerns the closing off of the offsetting cash transaction loophole in the provision relating to non-cash consideration of share issue. I think that was recommended by the Eggleston Company Law Advisory Committee but there is no embodiment of that recommendation in this legislation.

Mr Moore —That is contained in the general review to which I referred before.

Mr JACOBI —That is being generally reviewed, is it? I wish to make a passing reference to the United Kingdom Companies Act 1980 which contains a requirement for non-cash considerations for shares to be subject to expert independent valuation. That is the part of which there is an appalling gap in the report of the issuing by company shareholders to the Corporate Affairs Commission. I will not canvass the whole issue to the report which was very competently made to the South Australian Government in 1977. Actually, to be blunt, there was no excuse for the members of the Ministerial Council not to have applied their minds to the issue. The matter was looked at in depth in 1977. I wonder what research has been done in the departments in the respective States, including our own area.

In the few minutes remaining before we suspend the sitting for dinner I will make some reference to the United Kingdom Act. I suggest to the Minister that this is one area that ought to be looked at closely by the Ministerial Council. I will read some brief extracts from sections 24 to 27 of the United Kingdom Companies Act 1980. Sub- section (1) of section 24 reads:

. . . a public company shall not allot shares as fully or partly paid up . . . otherwise than in cash unless--

This is then set out in paragraph (b) which states:

A report with respect to its value has been made to the company by a person appointed by the company--

Paragraph (c) states:

A copy of the report has been sent to the proposed allottee of the shares.

Sub-section (4) states:

The valuation and report required by sub-section (1) above shall be made by an independent person . . . who-

(a) appears to him to have the requisite knowledge and experience to value the consideration or that part of the consideration; and

(b) is not an officer or servant of the company or any other body corporate which is that company's subsidiary or holding company or a subsidiary of that company's holding company or a partner or employer of such an officer or servant;

Sub-section (5) states:

The independent person's report . . . shall state-

(a) the nominal value of the shares-

(b) the amount of any premium payable on those shares;

(c) the description of the consideration-

(d) the extent to which the nominal value of the shares and any premium are to be treated as paid up-

(i) by the consideration;

(ii) in cash.

I will not read any further. The point I am trying to make simply is that there is more than ample coverage in a provision if it were inserted in the Bill to cover this situation as has been done in the United Kingdom Act. As I said earlier I see no reason at all why in fact the Ministerial Council or its advisers could not have examined this provision in the period they have had. It is not an unusual provision to be in the United Kingdom Act. It is also far more competently set out, if I might say so, in the Swedish Act. In looking at the position generally it is an indictment again of the Ministerial Council and its advisers.

Clause agreed to.

Clauses 114 and 115-by leave-taken together, and agreed to.

Sittings suspended from 6 to 8 p.m.

Clause 116 agreed to.

Clause 117 (Power to make certain payments).