Office of Public Sector Information
PART II continued
(4) Where this section applies, the transfer scheme may provide that the amount to be included in the opening accounts of the transferee in respect of any item shall be determined as if so much of anything done (or treated as done) by the transferor (whether by way of acquiring, revaluing or disposing of any asset or incurring, revaluing or discharging any liability, or by carrying any amount to any provision or reserve, or otherwise) as may be determined by or in accordance with the transfer scheme had been done by the transferee.
(5) Without prejudice to the generality of the preceding provisions of this section, where this section applies, the transfer scheme may provide—
(a) that the amount to be included from time to time in any reserves of the transferee as representing its accumulated realised profits shall be determined as if such proportion of any profits realised and retained by the transferor as may be determined by or in accordance with the transfer scheme, had been realised and retained by the transferee;
(b) that the amount to be included from time to time in the opening accounts and any subsequent statutory accounts of the transferee as representing its accumulated realised losses shall be determined as if such proportion of any accumulated realised losses of the transferor as may be determined by or in accordance with the transfer scheme had been losses realised by the transferee.
(6) In this section—
“accounting year” means—
in the case of the Board, the period of twelve months ending with 31st March in any year; and
in the case of any company, its financial year, within the meaning of the [1985 c. 6.] Companies Act 1985;
“the last full accounts”, in connection with any transfer scheme, means—
where the Board is the transferor, the annual accounts prepared by the Board in accordance with section 24 of the [1962 c. 46.] Transport Act 1962 for the accounting year last ended before the making of the transfer scheme; and
where any other person is the transferor, the statutory accounts of that person for the accounting year last ended before the making of the transfer scheme;
“the opening accounts of the transferee” means any statutory accounts prepared by the transferee for the accounting year next ending after the transfer date;
“statutory accounts” means any accounts prepared by a company for the purpose of any provision of the [1985 c. 6.] Companies Act 1985 (including group accounts).
(1) Where, in exercise of any functions conferred on him by section 86 above or transferred to him by an order under section 87 above, the Franchising Director or the Secretary of State (in this section referred to as “the relevant authority”) proposes to make a transfer scheme, he may direct any person to whom this section applies—
(a) to furnish him with such information as the relevant authority considers necessary to enable him to make the scheme; and
(b) to do so within such time (being not less than 28 days from the giving of the direction) as may be specified in the direction;
and the persons to whom this section applies are the Regulator, the Board, any wholly owned subsidiary of the Board, any publicly owned railway company, any franchise company and any company which is wholly owned by the Franchising Director.
(2) If a person fails to comply with a direction under subsection (1) above, the relevant authority may serve a notice under subsection (3) below on that person.
(3) A notice under this subsection is a notice signed by the relevant authority and—
(a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the relevant authority or to any person appointed by the relevant authority for the purpose, any documents which are specified or described in the notice and are in that person’s custody or under his control; or
(b) requiring that person to furnish, at a time and place and in the form and manner specified in the notice, to the relevant authority such information as may be specified or described in the notice.
(4) No person shall be required under this section to produce any documents which he could not be compelled to produce in civil proceedings in the court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.
(5) A person who without reasonable excuse fails to do anything required of him by notice under subsection (3) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(6) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (3) above to produce is guilty of an offence and shall be liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(7) If a person makes default in complying with a notice under subsection (3) above, the court may, on the application of the relevant authority, make such order as the court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.
(8) Any reference in this section to the production of a document includes a reference to the production of a legible and intelligible copy of information recorded otherwise than in legible form; and the reference to suppressing a document includes a reference to destroying the means of reproducing information recorded otherwise than in legible form.
(9) In this section “the court” means the High Court, in relation to England and Wales, and the Court of Session, in relation to Scotland.
(1) A transfer scheme made by the Board or the Franchising Director, otherwise than under section 86 above, shall not come into force unless it has been approved by the Secretary of State or until such date as the Secretary of State may specify for the purpose in giving his approval.
(2) The Secretary of State shall not make a transfer scheme except after consultation with the transferor.
(3) Before approving a transfer scheme made by the Franchising Director or the Board, the Secretary of State, after consultation with the transferor and, in the case of a scheme made by the Franchising Director, with the Franchising Director, may modify the scheme.
(4) It shall be the duty of the transferor to provide the Secretary of State with all such information and other assistance as he may require for the purposes of or in connection with the exercise, in relation to a transfer scheme, of any power conferred on him by this section.
The provisions of Schedule 8 to this Act shall apply to any transfer by virtue of a transfer scheme; and sections 85(6) and 86(4) above shall have effect subject to the provisions of that Schedule.
(1) This section applies where any property, rights or liabilities are vested in accordance with a transfer scheme in a successor company which at the time of the vesting is either—
(a) a wholly owned subsidiary of the Board; or
(b) Government owned.
(2) Where this section applies, the successor company shall, as a consequence of the vesting referred to in subsection (1) above, issue to the appropriate person such securities of that company as may from time to time be directed—
(a) by the Secretary of State, if the transfer scheme was made in pursuance of a direction given by him; or
(b) in any other case, by the Board with the consent of the Secretary of State.
(3) The “appropriate person” for the purposes of subsection (2) above is—
(a) the Board, in a case where the direction under that subsection is given at a time when the successor company is a wholly owned subsidiary of the Board; or
(b) the Secretary of State, in a case where the direction under that subsection is given at a time when the successor company is Government owned.
(4) No direction shall be given under subsection (2) above to the successor company at any time after that company—
(a) has ceased to be Government owned, or
(b) has ceased to be a wholly owned subsidiary of the Board,
unless, in a case where paragraph (b) above would otherwise apply, the cessation mentioned in that paragraph occurs in consequence of the successor company’s becoming Government owned pursuant to a direction under section 88(6) above, in which case directions under subsection (2) above may continue to be given until the company ceases to be Government owned.
(5) Securities required to be issued in pursuance of a direction under subsection (2) above shall be issued or allotted at such time or times, and on such terms, as may be specified in the direction.
(6) Shares of the successor company which are issued in pursuance of a direction under subsection (2) above—
(a) shall be of such nominal value as the Secretary of State may direct; and
(b) shall be issued as fully paid and treated for the purposes of the [1985 c. 6.] Companies Act 1985 as if they had been paid up by virtue of the payment to that company of their nominal value in cash.
(7) Any dividends or other sums received by the Treasury or the Secretary of State in right of, or on the disposal of, any securities acquired by virtue of this section shall be paid into the Consolidated Fund.
(8) In this section, “Government owned”, in relation to any successor company, means wholly owned by the Crown, but not wholly owned by the Franchising Director.
(1) The Treasury or, with the approval of the Treasury, the Secretary of State may at any time acquire securities of a successor company which at that time is—
(a) a wholly owned subsidiary of the Board; or
(b) wholly owned by the Crown.
(2) The Secretary of State shall not dispose of any securities acquired under this section without the approval of the Treasury.
(3) Any expenses incurred by the Treasury or the Secretary of State in consequence of the provisions of this section shall be paid out of money provided by Parliament.
(4) Any dividends or other sums received by the Treasury or the Secretary of State in right of, or on the disposal of, any securities acquired under this section shall be paid into the Consolidated Fund.
(1) The Treasury or, with the approval of the Treasury, the Secretary of State may, for the purposes of section 98 or 99 above or section 106 below, appoint any person to act as the nominee, or one of the nominees, of the Treasury or the Secretary of State; and—
(a) securities of a successor company may be issued under section 98 above or section 106 below to any nominee of the Treasury or the Secretary of State appointed for the purposes of that section, and
(b) any such nominee appointed for the purposes of section 99 above may acquire securities under that section,
in accordance with directions given from time to time by the Treasury or, with the consent of the Treasury, by the Secretary of State.
(2) Any person holding any securities as a nominee of the Treasury or the Secretary of State by virtue of subsection (1) above shall hold and deal with them (or any of them) on such terms and in such manner as the Treasury or, with the consent of the Treasury, the Secretary of State may direct.
(1) As soon as he considers expedient and, in any case, not later than six months after any operating company ceases to be a public sector railway company, the Secretary of State shall by order fix a target investment limit in relation to the shares for the time being held in that company by virtue of any provision of this Part by the Treasury and their nominees and by the Secretary of State and his nominees (in this section referred to as “the Government shareholding”).
(2) The target investment limit for the Government shareholding in an operating company shall be expressed as a proportion of the voting rights which are exercisable in all circumstances at general meetings of the company (in this section referred to as “the ordinary voting rights”).
(3) The first target investment limit fixed under this section for the Government shareholding in a particular company shall not exceed, by more than 0.5 per cent. of the ordinary voting rights, the proportion of those rights which is in fact carried by the Government shareholding in that company at the time when the order fixing the limit is made.
(4) The Secretary of State may from time to time by order fix a new target investment limit for the Government shareholding in an operating company in place of the one previously in force under this section; but—
(a) any new limit must be lower than the one it replaces; and
(b) an order under this section may only be revoked by an order fixing a new limit.
(5) It shall be the duty of the Treasury and of the Secretary of State so to exercise—
(a) their powers under section 99 above and any power to dispose of any shares held by virtue of any provision of this Part, and
(b) their power to give directions to their respective nominees,
as to secure in relation to each operating company that the Government shareholding in that company does not carry a proportion of the ordinary voting rights exceeding any target investment limit for the time being in force under this section in relation to that company.
(6) Notwithstanding subsection (5) above but subject to subsection (7) below, the Treasury or the Secretary of State may take up, or direct any nominee of the Treasury or of the Secretary of State to take up, any rights which are for the time being available to them or him, or to the nominee, either—
(a) as an existing holder of shares or other securities of an operating company; or
(b) by reason of the rescission of any contracts for the sale of such shares or securities.
(7) If, as a result of anything done under subsection (6) above, the proportion of the ordinary voting rights carried by the Government shareholding in an operating company at any time exceeds the target investment limit for the time being in force under this section in relation to that company, it shall be the duty of the Treasury or, as the case may be, the Secretary of State to comply with subsection (5) above as soon after that time as is reasonably practicable.
(8) For the purposes of this section the temporary suspension of any of the ordinary voting rights shall be disregarded.
(9) The Secretary of State shall not exercise any power conferred on him by this section except with the consent of the Treasury.
(10) In this section—
“operating company” means a successor company—
which is a company limited by shares and formed and registered under the [1985 c. 6.] Companies Act 1985 (or the former Companies Acts, as defined in section 735(1)(c) of that Act);
which was a public sector railway company at the time when any property, rights or liabilities of another public sector railway company were vested in it by a transfer scheme;
which has since ceased to be a public sector railway company; and
which at the time of the vesting referred to in paragraph (b) above was not, and at no time since has been, a franchise company;
“public sector railway company” means—
the Board;
any wholly owned subsidiary of the Board; or
any publicly owned railway company.
(1) If articles of association of a successor company confer on the Secretary of State powers exercisable with the consent of the Treasury for, or in connection with, restricting the sums of money which may be borrowed or raised by the group during any period, those powers shall be exercisable in the national interest notwithstanding any rule of law and the provisions of any enactment.
(2) For the purposes of this section an alteration of the articles of association of a successor company shall be disregarded if the alteration—
(a) has the effect of conferring or extending any such power as is mentioned in subsection (1) above; and
(b) is made at a time when that company is neither a wholly owned subsidiary of the Board nor wholly owned by the Crown.
(3) In this section “group”, in relation to a company, means that company and all of its subsidiaries taken together.
(1) The Secretary of State may, with the approval of the Treasury, make loans of such amounts as he thinks fit to any successor company which is for the time being wholly owned by the Crown.
(2) Any loans which the Secretary of State makes under this section shall be repaid to him at such times and by such methods, and interest on any such loans shall be paid to him at such rates and at such times, as he may, with the approval of the Treasury, from time to time direct.
(3) The Treasury may issue out of the National Loans Fund to the Secretary of State such sums as are required by him for making loans under this section.
(4) Any sums received under subsection (2) above by the Secretary of State shall be paid into the National Loans Fund.
(5) It shall be the duty of the Secretary of State as respects each financial year—
(a) to prepare, in such form as the Treasury may direct, an account of sums issued to him in pursuance of subsection (3) above and of sums received by him under subsection (2) above and of the disposal by him of the sums so issued or received; and
(b) to send the account to the Comptroller and Auditor General not later than the end of the month of August in the following financial year;
and the Comptroller and Auditor General shall examine, certify and report on the account and shall lay copies of it and of his report before each House of Parliament.
(1) The Treasury may guarantee, in such manner and on such terms as they may think fit, the repayment of the principal of, the payment of interest on, and the discharge of any other financial obligation in connection with, any sums which are borrowed from a person other than the Secretary of State by any successor company which is for the time being wholly owned by the Crown.
(2) Immediately after a guarantee is given under this section, the Treasury shall lay a statement of the guarantee before each House of Parliament; and immediately after any sum is issued for fulfilling a guarantee so given, the Treasury shall so lay a statement relating to that sum.
(3) Any sums required by the Treasury for fulfilling a guarantee under this section shall be charged on and issued out of the Consolidated Fund.
(4) If any sums are issued in fulfilment of a guarantee given under this section, the company whose obligations are so fulfilled shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct—
(a) payments of such amounts as the Treasury may so direct in or towards repayment of the sums so issued; and
(b) payments of interest on what is outstanding for the time being in respect of sums so issued at such rate as the Treasury may so direct.
(5) Any sums received under subsection (4) above by the Treasury shall be paid into the Consolidated Fund.
(1) The Secretary of State may, with the approval of the Treasury, make to any successor company which is for the time being wholly owned by the Crown grants of such amounts, at such times and in such manner, as he may with the approval of the Treasury determine, towards the expenditure of that company.
(2) Grants under this section may be made subject to such conditions as the Secretary of State with the approval of the Treasury may determine.
(3) Any sums required by the Secretary of State for making grants under this section shall be paid out of money provided by Parliament.
(1) The Secretary of State may by order extinguish all or any of the liabilities of a successor company which is for the time being—
(a) a wholly owned subsidiary of the Board, or
(b) wholly owned by the Crown,
in respect of the principal of such relevant loans as may be specified in the order; and the assets of the National Loans Fund shall accordingly be reduced by amounts corresponding to any liabilities so extinguished.
(2) Where the Secretary of State has made an order under subsection (1) above and he considers it appropriate to do so, he may from time to time give a direction under this subsection to the company whose liabilities are extinguished by the order, or to a company or companies wholly owning the company whose liabilities are so extinguished; and a company to which such a direction is given shall, as a consequence of the making of the order, issue such securities of the company as may be specified or described in the direction—
(a) to the Treasury or the Secretary of State; or
(b) if it is the company whose liabilities are extinguished by the order, to a company or companies wholly owning that company.
(3) For the purposes of any statutory accounts of a company to whom securities are issued by virtue of subsection (2)(b) above, the value at the time of its issue of any such security shall be taken—
(a) in the case of a share, to have been equal to its nominal value; and
(b) in the case of a debenture, to have been equal to the principal sum payable under the debenture,
and such nominal value or principal sum shall be taken in those accounts to be accumulated realised profits.
(4) In subsection (3) above “statutory accounts of a company” means any accounts prepared by the company for the purpose of any provision of the [1985 c. 6.] Companies Act 1985 (including group accounts).
(5) The Secretary of State—
(a) shall not give a direction under subsection (2) above for the issue of securities except at a time when the company whose liability is extinguished by the order or, as the case may be, the company which is directed to issue securities satisfies the condition in subsection (6) below; and
(b) shall not give a direction under paragraph (b) of subsection (2) above except at a time when the company, or each of the companies, to whom the securities are to be issued satisfies that condition.
(6) The condition referred to in subsection (5) above is that the company is for the time being—
(a) a wholly owned subsidiary of the Board; or
(b) wholly owned by the Crown.
(7) Unless the Secretary of State otherwise determines in any particular case, where a company is directed to issue debentures in pursuance of this section—
(a) the aggregate of the principal sums payable under the debentures to which the direction relates shall be equal to the aggregate of the sums the liability to repay which is extinguished by the order; and
(b) the terms as to the payment of the principal sums payable on the debentures to which the direction relates, and as to the payment of interest on those principal sums, shall be the same as the corresponding terms of the loans specified in the order.
(8) For the purposes of subsection (7) above, any express or implied terms of a loan shall be disregarded in so far as they relate to the early discharge of liabilities to make repayments of principal and payments of interest.
(9) Subsections (5) to (7) of section 98 above shall apply for the purposes of this section as they apply for the purposes of that section.
(10) The Secretary of State shall not exercise any power conferred on him by this section except with the consent of the Treasury.
(11) In this section “relevant loan”, in relation to a successor company, means any loan made to the Board under section 20 of the [1962 c. 46.] Transport Act 1962, if and to the extent that the liability to repay that loan is transferred to and vested in that company by virtue of a transfer scheme.
(12) For the purposes of this section the company or companies wholly owning another company are—
(a) any company of which that other is a wholly owned subsidiary, or
(b) any two or more companies which between them hold all the issued securities of that other.
(1) In any case where—
(a) the same document contains listing particulars for securities of two or more licensed successor companies, and
(b) any person’s responsibility for any information included in the document is stated in the document to be confined to its inclusion as part of the listing particulars for securities of any one of those companies,
that person shall not be treated as responsible for that information in so far as it is stated in the document to form part of the listing particulars for securities of any other of those companies.
(2) Sections 150 and 154 of the 1986 Act (advertisements etc in connection with listing applications) shall have effect in relation to any information issued for purposes connected with any securities of a licensed successor company as if any reference to a person’s incurring civil liability included a reference to any other person being entitled, as against that person, to be granted a civil remedy or to rescind or repudiate any contract.
(3) Subsections (1) and (2) above have effect only in relation to licensed successor companies—
(a) which are wholly owned subsidiaries of the Board; or
(b) which are wholly owned by the Crown.
(4) In this section—
“the 1986 Act” means the [1986 c. 60.] Financial Services Act 1986;
“licensed successor company” means a successor company which is the holder of a licence under section 8 above;
“listing particulars” means any listing particulars or supplementary listing particulars within the meaning of the 1986 Act;
“responsible” means responsible for the purposes of Part IV of the 1986 Act and “responsibility” shall be construed accordingly.
(1) Subsection (2) below shall have effect for the purpose of applying paragraph 3(b) of Part IV of Schedule 1 to the [1961 c. 62.] Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count as wider-range and narrower-range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment, during the first investment year or any following year, in shares or debentures of a licensed successor company—
(a) whose shares or debentures are included in the Official List, within the meaning of Part IV of the [1986 c. 60.] Financial Services Act 1986, in pursuance of that Part; and
(b) which, immediately before its shares or debentures were admitted to that Official List, was—
(i) a wholly owned subsidiary of the Board; or
(ii) a company wholly owned by the Crown.
(2) The licensed successor company shall be deemed to have paid a dividend as mentioned in the said paragraph 3(b)—
(a) in every year preceding the first investment year which is included in the relevant five years; and
(b) in the first investment year, if that year is included in the relevant five years and that company does not in fact pay such a dividend in that year.
(3) In this section—
“the first investment year”, in relation to a licensed successor company means the calendar year in which shares in that company are first issued in pursuance of section 98(2) above;
“licensed successor company” has the same meaning as it has in section 107 above;
“the relevant five years” means the five years immediately preceding the year in which the investment in question is made or proposed to be made.
After section 21 of the [1962 c. 46.] Transport Act 1962 (Treasury guarantees) there shall be inserted—
(1) The Secretary of State may, with the approval of the Treasury, make to the Railways Board grants of such amounts, at such times and in such manner, as he may with the approval of the Treasury determine—
(a) towards the expenditure of that Board; or
(b) without prejudice to paragraph (a) of this subsection, for the purpose of enabling that Board to make any payment (whether by way of repayment of principal or payment of interest or of any other description) in respect of any loan made to them under section twenty of this Act.
(2) Grants under this section may be made subject to such conditions as the Secretary of State may with the approval of the Treasury determine.
(3) Any sums required by the Secretary of State for making grants under this section shall be paid out of money provided by Parliament.
(4) This section is without prejudice to any other power to make grants to the Railways Board.”.
(1) If the Secretary of State by order so provides, sections 19 to 21A of the [1962 c. 46.] Transport Act 1962 (which, among other things, make provision for and in connection with—
(a) the borrowing powers of the Board,
(b) the making by the Secretary of State of loans to the Board,
(c) the giving by the Treasury of guarantees in respect of sums borrowed by the Board from persons other than the Secretary of State, and
(d) the making by the Secretary of State of grants to the Board),
shall apply in relation to any wholly owned subsidiary of the Board designated in the order as they apply in relation to the Board, but with such modifications as may be specified in the order.
(2) Without prejudice to the generality of the modifications of those sections that may be specified in an order under this section, any such order may include provision imposing limits on the amounts that may be outstanding at any time in respect of the principal of any money borrowed by wholly owned subsidiaries of the Board under section 19 of the [1962 c. 46.] Transport Act 1962 in its application by virtue of this section.
In section 42 of the [1968 c. 73.] Transport Act 1968, in subsection (6) (limit on aggregate amount outstanding in respect of the principal of any money borrowed by the Board under section 19 of the [1962 c. 46.] Transport Act 1962 and the Board’s commencing capital debt), paragraph (b) (which relates to the Board’s commencing capital debt, and which is spent) shall be omitted and after that paragraph there shall be inserted—
“(c) the principal of any money borrowed by wholly owned subsidiaries of the Board under that section in its application by virtue of section 110 of the Railways Act 1993,”.
Schedule 9 to this Act (which makes provision about stamp duty and stamp duty reserve tax in relation to or in connection with the other provisions of this Part) shall have effect.
Railways Act 1993