PART II.

The Corporation.

5. —In this Part—

the expression “the Companies Acts” means the Companies Acts, 1908 to 1924;

the word “director” means a director of the Corporation;

the expression “existing shares” means the “A” and “B” shares of the Corporation issued under the Principal Act, as amended by the Amending Act of 1929;

the expression “new shares” means shares of the Corporation to be issued and allotted to the Minister in pursuance of section 9 of this Act.

6. —The Minister, after consultation with the Corporation, may by order appoint a day to be the appointed day for the purposes of this Part.

7. —(1) As on and from the appointed day, the capital of the Corporation shall be £300,000 (three hundred thousand pounds) divided into six hundred thousand shares of ten shillings each.

(2) On the appointed day all existing shares shall by virtue of this section be cancelled.

8. —(1) In this section—

the expression “registered holder” means a person who is or, in the case of a joint holding of existing shares, two or more persons who are, on the day immediately preceding the appointed day, the registered holder of one or more existing shares, but does not include the Minister;

the expression “appropriate sum” means, in relation to a registered holder, a sum of money calculated at the rate of ten shillings for each existing share held by such registered holder.

(2) (a) At least thirty days before the appointed day the Corporation shall serve on each registered holder notice that—

(i) his existing shares will be cancelled on the appointed day, and

(ii) the Corporation will on the appointed day pay to him an appropriate sum,

(b) Notices under paragraph (a) of this subsection may be served in accordance with the manner provided for the service of notices by the existing articles of association of the Corporation.

(3) On the appointed day, the Corporation shall pay to each registered holder an appropriate sum.

(4) Each registered holder of any existing shares shall, in lieu of and in satisfaction of all rights and claims in respect of his existing shares, accept the payment to be made to him in pursuance of subsection (3) of this section.

(5) (a) The Corporation shall, on such date (not later than sixty days after the appointed day) as the Corporation, with the consent of the Minister, may fix, pay to each registered holder a dividend calculated at the rate of five per cent. per annum on the amount paid up in respect of existing shares held on the day immediately preceding the appointed day by such registered holder, for the period commencing on the day next following the latest date before the appointed day on which a dividend was paid by the Corporation and ending on the day immediately preceding the appointed day, and such registered holder shall not be entitled to any other dividend in respect of such shares for such period.

(b) If, on the date fixed under paragraph (a) of this subsection, the Corporation has not any or sufficient moneys available and applicable for the payments required to be made under the said paragraph (a) the Corporation shall forthwith certify to the Minister the sum which, with the moneys (if any) so available and applicable, is required to make such payments and upon receipt of such certificate the Minister shall pay to the Corporation the amount so certified and the Corporation shall forthwith apply the moneys so received in or towards discharge of the said payments.

(c) All moneys payable by the Minister to the Corporation under paragraph (b) of this subsection shall be paid out of and shall be charged upon the Central Fund or the growing produce thereof.

(6) The Corporation may, for the purposes of this section, close its share register for a period of forty days expiring on the appointed day and refuse to register any transfer of existing shares during that period.

9. —(1) On the appointed day, the Corporation shall, in lieu of and in full satisfaction of all claims and rights in respect of existing shares registered in the name of the Minister, issue and allot to the Minister five hundred and eighty-four thousand two hundred and thirty-seven fully paid up shares of ten shillings each of the Corporation.

(2) (a) On the appointed day, the Corporation shall also issue and allot to the Minister fifteen thousand seven hundred and sixty-three fully paid up shares of ten shillings each of the Corporation.

(b) On the appointed day, the Minister shall pay to the Corporation as consideration for the issue to him of shares of the Corporation in pursuance of this subsection, the sum of £7,881 10s. 0d. (seven thousand, eight hundred and eighty-one pounds and ten shillings).

(c) All moneys payable by the Minister to the Corporation in pursuance of this subsection shall be paid out of and shall be charged on the Central Fund or the growing produce thereof, and for the purpose of providing the said moneys the Minister may borrow moneys by means of the issue of such securities as he thinks proper and all moneys so borrowed shall be paid into, the Exchequer.

10. —(1) Subject to this section, the Minister may, in respect of new shares for the time being held by him, exercise all or any of the rights and powers from time to time exercisable by the holder of such new shares, and where such rights or powers are exercisable by attorney the Minister may, if he so thinks proper, exercise such rights and powers by his attorney, and for this purpose may appoint one person to be his attorney as respects certain new shares held by him and another person to be his attorney as respects other new shares held by him.

(2) The Minister, from time to time as occasion requires, may, for the purpose of compliance with so much of the Companies Acts as requires that there shall always be at least seven members of the Corporation or for the purpose of providing a person appointed or about to be appointed a director with the necessary qualification, do either or both of the following things, that is to say—

(a) transfer to any person one new share for the time being held by the Minister,

(b) require any member of the Corporation to transfer any new share held by him to the Minister or to any other person appointed in that behalf by the Minister.

(3) Every member (other than the Minister) of the Corporation or the personal representative of such member shall hold his new shares in trust for the Minister and shall be accordingly bound to pay every dividend, bonus and other money received by such member on or in respect of such new shares to the Minister for the benefit of the Exchequer and to transfer, as and when required by the Minister, such new shares to the Minister or to a person nominated in that behalf by the Minister.

(4) If any member of the Corporation dies or is declared a bankrupt or makes an arrangement with his creditors or is declared of unsound mind, the Minister may execute a transfer of the new shares held by such member either to the Minister or to another person and thereupon the said new shares shall vest in the person specified in the said transfer.

(5) Save as authorised or required by this section no member of the Corporation (including the Minister) shall transfer any new shares for the time being held by him.

11. —Every dividend, bonus and other money received by the Minister in respect of new shares held by, or in trust for, him shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister may direct.

12. —(1) The persons who are immediately before the appointed day the directors shall on the appointed day cease to hold office.

(2) On and after the appointed day—

(a) the number of directors (including the chairman) shall be not less than three nor more than five,

(b) the directors shall be nominated by the Minister,

(c) the qualification for being a director shall be the holding of at least one share in the Corporation.

13. —(1) (a) On and after the appointed day, it shall be lawful for the Minister from time to time to make advances to the Corporation and for the Corporation to borrow from the Minister out of moneys provided by the Oireachtas such sums as the Corporation may require for the purposes of its business, upon such terms as to repayment as the Minister in his discretion may determine, but so that the total amount owing on foot of such advances at any one time shall not in the aggregate exceed two hundred and fifty thousand pounds.

(b) The Corporation shall pay to the Minister on every sum advanced to the Corporation under this subsection from the date of the advance of such sum until such sum has been repaid, interest at such rate (not being less than the rate payable, at the date of the advance, on advances from the Central Fund to the Local Loans Fund) and on such date or dates as shall from time to time be appointed by the Minister in that behalf.

(c) All moneys paid to the Minister by the Corporation in respect of repayment of advances made under the provisions of this subsection or of interest on such advances shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister may direct.

(2) It shall be lawful for the Corporation with the approval of the Minister to borrow at any time or times by way of overdraft or other temporary advance from any Bank or other credit institution such sums as the Corporation may require either (as may be specified in the approval) for the purposes of its business generally or for a particular purpose, but so that the total amount owing on foot of such overdrafts or other temporary advances at any one time shall not in the aggregate exceed two hundred and fifty thousand pounds.

14. —(1) It shall be lawful for the Corporation so to alter its memorandum and articles of association that the same shall be so framed and expressed that the Corporation shall be entitled and authorised to lend or advance money upon such security, as the directors may deem proper, only to the persons and for the purposes hereinafter stated, that is to say:—

(a) to any person (being a farmer) for the purpose of—

(i) constructing buildings on such person's farm, or

(ii) making on such person's farm improvements of a permanent character calculated to increase or facilitate or conduce to the increase of the productivity thereof, or

(iii) purchasing livestock, or

(iv) purchasing agricultural machinery or implements, or

(v) purchasing materials, manures, feeding stuffs, seeds or other requisites of agricultural production or marketing, or

(vi) purchasing land which was immediately before the purchase owned by the Corporation or comprised in a security held by the Corporation for a loan or advance, or

(vii) establishing, carrying on or extending such person's business, or

(viii) paying off and discharging a debt or other liability for which such person may be liable and which was incurred (whether before or after the passing of this Act) by such person or by any other person wholly or mainly for a purpose for which a loan may lawfully be made by the Corporation, or

(ix) paying off or discharging a debt incurred at any time for the purpose of purchasing land for agricultural purposes, or

(x) paying off a mortgage, charge, burden, annuity or incumbrance on land or any debt where, in the opinion of the directors, the paying off of such mortgage, charge, burden, annuity or incumbrance on land or debt will facilitate the person whose lands are subject to the same or who may be liable for same in carrying on his business as a farmer or in effecting economies or in avoiding losses, or

(xi) paying off a mortgage, charge, burden, annuity or incumbrance on land or a loan borrowed for the purpose of paying off a mortgage, charge, burden, annuity or incumbrance on land where, in the opinion of the directors, the making of an advance to such person, for the purpose of paying off such mortgage, charge, burden, annuity, incumbrance on land or loan, will facilitate the making and securing the repayment of an advance made or intended to be made by the Corporation to such person for any purpose for which the Corporation is authorised to make an advance, or

(xii) providing such person with working capital;

(b) to any individual (being a farmer) for the purpose of financing, carrying out or completing a settlement or arrangement of his family affairs or property;

(c) to any person (being a farmer) for any purpose which, in the opinion of the directors, is related to agriculture;

(d) to any person, engaged in or proposing to engage in an enterprise primarily designed for the service of farmers, for the purposes of establishing, carrying on or extending such enterprise;

(e) to any person for the purpose of discharging the costs and expenses of borrowing money from the Corporation, of giving security to the Corporation therefor, or of perfecting such person's title to any land.

(2) (a) The memorandum and articles of association of the Corporation shall also be so framed and expressed that the persons to whom and the purposes for which the Corporation shall be entitled and authorised to lend or advance money as stated in such memorandum and articles in pursuance of this section may be varied (whether by extension, restriction or otherwise) from time to time by the Minister and the Minister for Agriculture at their joint discretion by orders made by them jointly, but so that such persons and purposes shall not by any such order be extended so as to include—

(i) any person who is not engaged or about to engage in agriculture or in a business or enterprise of an agricultural character or calculated directly or indirectly to benefit primarily persons engaged in agriculture, or

(ii) any person to whom the Corporation is expressly forbidden by this section to make a loan or advance, or

(iii) any purpose which is not directly or indirectly related to or concerned with agriculture.

(b) Every order made by the Minister and the Minister for Agriculture under paragraph (a) of this subsection shall be laid before each House of the Oireachtas as soon as may be after it is made and unless either such House shall, within twenty-one days after the first day on which such House sits after such order is laid before it, pass a resolution annulling such order, such order shall come into operation at the expiration of twenty-one days from whichever of the following days is the later that is to say the first day on which Dáil Eireann sits after such order is laid before it or the first day on which Seanad Eireann sits after such order is laid before it.

(3) (a) The Corporation shall not, for the purposes specified in paragraph (d) of subsection (1) of this section, make any loan or advance to—

(i) any body corporate which, in the opinion of the directors, does not, as its principal business, engage in one or more of the following activities—

(I) the giving of agricultural credit,

(II) the production, processing or marketing of agricultural produce,

(III) the sale or hire of agricultural machinery or implements,

(IV) the production or supply of manures, feeding stuffs, seeds or other requisites of agricultural production or marketing,

(V) the production of any one or more of the following, namely, water, power and light, for distribution mainly to farmers,

(VI) the provision of works or services calculated, directly or indirectly, to benefit primarily persons engaged in agriculture, or

(ii) any body corporate, which, in the opinion of the directors, carries on, as a substantial part of its business, the selling by retail of any goods which are neither produced by that body corporate or (if it is a co-operative society) its members nor are requisites of agricultural production or marketing;

(b) where goods sold by a body corporate are mainly goods produced by that body corporate or (if it is a co-operative society) its members, any similar goods occasionally sold by that body corporate may, for the purposes of sub-paragraph (ii) of paragraph (a) of this subsection, be deemed to have been so produced although in fact produced by other persons and purchased by that body corporate from them.

(4) The Corporation shall not make any loan or advance any money to a director.

(5) (a) The Corporation shall not lend or advance any money to any person (other than a co-operative society) so as to cause the total amount of principal owing at any one time by such person to the Corporation to exceed ten thousand pounds.

(b) In computing for the purposes of this subsection the total amount of principal owing at any one time by a person to the Corporation, no account need be taken of—

(i) any contingent liability which such person may incur or have incurred towards the Corporation as a guarantor or surety, or

(ii) any interest which may accrue due or may be unpaid on any loans or advances made by the Corporation to such person, or

(iii) any moneys the repayment of which is secured by a mortgage or charge in favour of the Corporation on any real or personal property which has or may become vested subject to such mortgage or charge in such person as a beneficiary under a settlement or trust or under a will or an intestacy of any other person or as trustee of a will or settlement or as a successor in title or as an assignee or transferee of any other person, or

(iv) any payments made by the Corporation for the purposes of protecting or preserving any security given to the Corporation by such person.

(6) Notwithstanding anything contained in this section, the Corporation may invest moneys in its hands in any of the stocks, funds and securities which are for the time being authorised by law as investments for Post Office Savings Bank funds or in the purchase of or subscription for such securities as may from time to time be approved (either generally or particularly) by the Minister for the purposes of this subsection.

(7) The first reference in subsection (1) of section 9 of the Principal Act to the restrictions imposed by the Principal Act shall be construed as a reference to this section.

(8) Subsections (3), (4), (5), (6) and (7) of this section shall come into operation on the appointed day.

15. —(1) So long as any portion of a loan or advance made by the Corporation to a co-operative society (in this subsection referred to as the debtor society) remains owing to the Corporation—

(a) the debtor society shall not lend money at interest to any person other than a person to whom the Corporation may lend or advance money;

(b) the debtor society shall not lend money at interest to any body corporate engaged in or carrying on, as a substantial part of its business, the selling by retail of any goods which are neither produced by that body corporate or (if it is a co-operative society) its members nor are requisites of agricultural production or marketing;

(c) the debtor society shall not itself engage in or carry on, as a substantial part of its business, the selling by retail of any goods which are neither produced by the debtor society or its members nor are requisites of agricultural production or marketing;

(d) if the debtor society contravenes the provisions of paragraph (a) or paragraph (b) or paragraph (c) of this subsection, the whole of the said loan or advance or so much of it as remains owing to the Corporation shall (notwithstanding any agreement to the contrary) forthwith become due and payable by the debtor society to the Corporation.

(2) Where the goods sold by a body corporate are mainly goods produced by that body corporate or (if it is a co-operative society) its members, any similar goods occasionally sold by that body corporate may for the purposes of subsection (1) of this section be deemed to have been so produced although in fact produced by other persons and purchased by that body corporate from them.

(3) Subsections (1) and (2) of this section shall come into operation on the appointed day.

16. —(1) The Corporation shall not discount or purchase any promissory note, bill of exchange or other negotiable instrument which—

(a) was made by a person to whom the Corporation is expressly forbidden by section 14 of this Act to lend or advance money, or

(b) was made otherwise than for the purpose of obtaining for the maker thereof or for any other person money for expenditure on a purpose for which a loan or advance could lawfully be made to such maker or person.

(2) Subsection (1) of this section shall not apply to, or be construed as rendering unlawful, the investment by the Corporation of moneys in the purchase of bills, notes or other negotiable instruments made by the Minister or by such other person as may be approved by the Minister.

(3) The second reference, in section 9 of the Principal Act, to the restrictions imposed by the Principal Act shall be construed as a reference to the restrictions imposed by this section.

(4) Subsections (1), (2) and (3) of this section shall come into operation on the appointed day.

17. —(1) Any reorganisation of the share capital of the Corporation made under this Part shall not be a reduction, alteration, consolidation, cancellation or reorganisation of the capital of the Corporation within the meaning of the Companies Acts, and the provisions of those Acts relating to the reduction, alteration, consolidation, cancellation or reorganisation of share capital or to the issue of new shares shall not apply to the reorganisation of the share capital of the Corporation authorised by this Part.

(2) On and after the appointed day, neither section 115 nor paragraph (iv) of section 129 of the Companies (Consolidation) Act, 1908, shall apply in respect of the Corporation, and the Minister may at any time be or continue to be the sole shareholder.

18. —(1) The Corporation shall, as soon as may be after the passing of this Act and before the appointed day, make all such alterations in its memorandum and articles of association as may be authorised by, and be requisite for giving effect to, the previous provisions of this Part, but such alterations shall not come into force until the appointed day.

(2) The Corporation may, at any time after the passing of this Act, so alter its memorandum of association that the same be so framed and expressed that the Corporation shall be entitled and authorised to receive from any person donations, contributions towards expenses, payments for services rendered on behalf of such person or any other moneys, but any such alteration, if made before the appointed day, shall not come into force until the appointed day.

(3) In addition to the alterations required by subsection (1) of this section or authorised by subsection (2) of this section to be made in the memorandum and the articles of association of the Corporation, it shall be lawful for the Corporation to make all such other alterations in its memorandum and articles of association as are necessary or proper by way of supplement to, or in consequence of, any alteration so required or authorised and also all such other alterations as shall be necessary or proper to give effect to the provisions of this Act.

(4) Subsection (2) of section 10 of the Principal Act shall not apply to alterations made in the memorandum or the articles of association of the Corporation under or in pursuance of this Act and in lieu thereof it is hereby enacted that all such alterations shall be in such form consistent with this Part as shall be approved by the Minister after consultation with the Minister for Agriculture.

(5) For the purposes of effecting any alterations in the articles of association of the Corporation required or authorised by this Part, section 13 of the Companies (Consolidation) Act, 1908, shall be construed as if the words “extraordinary resolution” were substituted for the words “special resolution” where the latter words first occur.

(6) Section 9 of the Companies (Consolidation) Act, 1908, shall not apply in respect of any alteration authorised by this Part to be made by the Corporation in its memorandum of association and in lieu thereof it is hereby enacted that every such alteration may be made by extraordinary resolution, as defined by section 69 of the Companies (Consolidation) Act, 1908, and that, in addition to complying with section 70 of that Act, the Corporation shall, within the time mentioned in the said section 70, deliver to the registrar of companies a printed copy of the memorandum as so altered and such registrar shall register the same and shall certify the registration under his hand and such certificate shall be conclusive evidence that all the requirements of that Act as amended by this section with respect to such alteration have been complied with and thenceforth the memorandum as so altered shall be the memorandum of the Corporation.

19. —(1) The Corporation shall, within ninety days after the end of each accounting year, furnish to the Minister such accounts (including a balance sheet and a profit and loss account) as the Minister may from time to time direct for that accounting year duly audited by the auditor of the Corporation, together with a report of the operations of the Corporation during that accounting year, and the said accounts and report shall be drawn up in such form and contain such particulars as the Minister may from time to time direct.

(2) A copy of each account and report furnished to the Minister pursuant to subsection (1) of this section shall as soon as may be thereafter be laid by him before each House of the Oireachtas.

(3) (a) The Minister may from time to time request the Corporation to furnish to him such information, in relation to the business of the Corporation, as he thinks proper and specifies in the request, and the Corporation shall comply with, every such request.

(b) The Corporation shall not under paragraph (a) of this subsection furnish or be required to furnish any information which would disclose the affairs of any particular borrower or applicant for a loan.

20. —The provisions of this Part shall have effect notwithstanding anything contained in the Companies Acts or the Acts or in the memorandum and articles of association of the Corporation.