, Secretary of State for
Business, Energy and Industrial Strategy told the House of
Commons that the MoD had concluded, following legally-binding
commitments made by Melrose, that statutory intervention was not
required on the grounds of national security.
Labour spokesman MP said Melrose's
undertakings were inadequate, especially on the lack of
commitment to keep jobs. She said the takeover regime was also
inadequate.
said had failed to say what
undertakings she would accept and had prejudiced her position by
saying Labour would have blocked the takeover. There were no
grounds on which the government could legally intervene.
Sir MP asked about sanctions if
undertakings were not kept, to which Mr Clark said the company
would be in contempt of court.
also asked what action
would be taken if there was a breach of undertakings and what
assurances had been given on jobs and financial restructuring and
how that related to the government’s industrial strategy. Mr
Clark said Melrose' commitments were valuable and welcome. On the
subject of jobs, GKN itself had made no commitments.
Replying to MP's call for a review of the
Takeover Code, Mr Clark said there had been a review of share
buying but he would keep arrangements for corporate governance
under review.
MP, chairman of the BEIS
Select Committee, also questioned the rules for short-term
speculation and differential voting rights. Mr Clark said he had
convinced Melrose to go beyond their original undertakings. He
suggested the BEIS Select Committee might want to conduct its own
review.
MP said the management and
workers at the GKN plant in his constituency were optimistic
about the future.
Sir said the role of
short-term investors had been highly destabilising. Mr Clark said
he wanted the regime of corporate governance to be the best in
the world and, if the BEIS committee did conduct an inquiry, he
would be happy to participate.
MP said Melrose had told her
they had no plans to shut the GKN head office in her Redditch
constituency. They had also said the relationship with Airbus
could continue.
MP said there was concern
about Melrose's short-termism reputation. He asked about the
nature of the commitments given.
MP said taxpayers should
expect companies receiving public money should be prepared to
give long-term undertakings. A similar line was taken by
.
Big Afolami MP said he had acted as an adviser to Melrose before
becoming an MP. agreed with him about the
importance of having an open, globalised economy based on
competition.
MP said this was a bleak day
for British industry and workers. The time had come for a
fundamental review of the corporate takeover regime.
MP, a former defence
minister, said the aerospace division was the jewel in the crown
of GKN and called for the MoD to be involved in the six-monthly
reviews that would take place.
MP asked what form the
government’s review of corporate governance would take. Mr Clark
said he would look at the assessment of the conduct of the bid,
but it would be wrong to say he had taken a different view.
Replying to MP, Mr Clark said whether
or not the bid had succeeded, this was always going to be a
period of change for GKN employees, but now they had more
certainty about the future.
MP asked if there had been a
commitment of longer than five years to the aerospace division
and whether the Secretary of State had spoken to Airbus. Mr Clark
said the five-year commitment was the longest ever given. The
Chief Executive of Airbus had not repeated the comments
previously reported and this had been discussed with Melrose.
Mr Clark told MP that GKN had an important
role to play in relation to the government’s industrial strategy.
expressed concern about
the amount of debt Melrose was taking on.
Replying to MP, Mr Clark said it
was because of the Kraft takeover of Cadbury that the government
had changed the takeover rules.
He told MP it was not clear there
would be greater instability under the incumbent management.
