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Coal Industry Nationalisation Act 1946

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23Restrictions on disposal of stock issued for compensation of companies

(1)Stock issued for compensation to a company legally entitled to the compensation by virtue of paragraph (a) of subsection (1) of section twenty of this Act, and any stock issued to the company in exchange therefor under subsection (4) of this section, shall be subject to restrictions as to the disposal thereof to the extent specified in this section.

(2)Such stock may be disposed of—

(a)at any time, by way of transfer to holders of debentures issued by the company in satisfaction of rights of theirs as such holders, or to members of the company in satisfaction of rights of theirs to a return of capital or to participation in surplus assets ;

(b)when the company is being wound up, by way of sale, or in any other manner, for any purpose other than satisfying rights of holders of debentures issued by the company, or of members of the company, as such holders or members ;

(c)when the company is not being wound up, by way of sale of so much of such stock as it may be requisite to sell for the purpose of satisfying rights of, or obligations of the company to, persons other than holders of debentures issued by the company as such or members of the company as such ;

(d)when the company is not being wound up, by way of sale of so much of such stock as it may be shown to the satisfaction of the Treasury to be requisite to sell for the purpose of raising an amount of liquid capital which in the opinion of the company is needed for business of the company or of a subsidiary within the meaning of the First Schedule to this Act of the company, or in order to facilitate a development or extension of business to be carried on by the company or such a subsidiary thereof, and which apart from this section the company would be entitled to raise ;

and, when any such stock has been so disposed of, it shall be free from any restriction under this section.

(3)Except as provided by the last preceding subsection, such stock shall not be sold or otherwise disposed of :

Provided that any illegality by virtue of this subsection of a disposal of stock shall not in anyway affect the title to that stock.

(4)The Treasury may by regulations make provision—

(a)for the issue of stock which on the issue thereof will be subject to restrictions under this section in the form of stock that is by the terms of issue thereof inalienable, so however that the regulations shall also provide for rendering any stock issued for compensation which is for the time being held in that form, and which is to be disposed of in accordance with subsection (2) of this section, exchangeable for a like amount of government stock having in all other respects the like incidents as the inalienable stock, but transferable in the ordinary manner appropriate to government stock of the class in question, and the regulations shall also provide for rendering all such stock so exchangeable at a date to be fixed by the Treasury as being the date when the purposes of this section have been substantially satisfied ;

(b)for arranging, where it is proposed to satisfy rights of holders of debentures issued by a company, or of members of a company, and to use for that purpose stock to be issued for compensation or stock to be issued in exchange under the preceding paragraph, for the issue thereof direct to them ;

(c)for rendering it obligatory on such holders or members to accept stock issued for compensation or stock issued in exchange under paragraph (a) of this subsection in satisfaction of rights which they would otherwise have as such holders or members to payments in cash, on the basis of the market value of the stock at the date of transfer or issue to them, subject to any provision for proceeding on the basis of its market value at an earlier date which may be requisite in connection with the making of arrangements for distribution amongst a number of persons or classes of persons.

(5)The Treasury may by regulations make provision for the application of this section, subject to such adaptations as may be prescribed, to stock issued for compensation to which a company is not legally entitled as mentioned in subsection (1) of this section, but in which the company is entitled to beneficial rights.

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