Committee reports high pass rates

Press, 13 June 1977, Page 22

Committee reports high pass rates

The Company Distributions and Directors Fees Appeal Committee, which administers the Companies (Limitation of Distributions) Regulations, 1976 and the Limitation of Directors Fees Regulations, 1976 held 48 meetings and considered 854 : cases concerning company distributions, and 157 cases concerning directors’ fees, in the year to May 14. With regard to company distributions, 556 or 65 per cent of the cases have been approved in part or in full, and 262 declined. Decisions were deferred in the remainder. The cases approved included dividends on shares allotted prior to the regulations coming into force or in respect of which there were firm commitments, and dividends paid by wholly-

owned subsidiaries to parent companies. Also included are companies making payments within the prescribed rates, but from share premium reserves, and liquidation distributions on the formal winding-up of the companies involved.

A significant number of the remaining approvals involved dividend payments on specified preference shares, and cases of hardship. As far as directors’ fees are concerned, 137 or 87 per cent of the cases have been approved, nearly half of these involving commitments entered into prior to the regulations coming into force. When additional directors have been appointed to a board the committee has been allowing them to receive the same fees as their fellow directors.