OFT boss seeks wider powers
Monday 05 February 1996
Powers to compel companies to produce internal board documents used in takeovers and mergers are to be requested by John Bridgeman, the new director general of Fair Trading.
The proposals come as Ian Lang, president of the Board of Trade, prepares the terms of reference for a new consultative document on reform of competition policy, which is expected to include much tougher powers of investigation for the OFT.
Mr Bridgeman said the OFT currently has no powers to seize internal board papers and other similar documents. The OFT was sometimes able to persuade companies to produce the documents but it had no right to do so and its powers in this area were limited.
Mr Bridgeman said "Were I able to see the paper case put up to a board of directors to secure their approval to a hostile takeover I would get a pretty good insight into what was in the minds of the management embarking on that takeover."
He added: "Even in a friendly merger, the same papers put to the respective boards of directors would be most helpful in coming to a quick view on the matter. Extra power to demand information and supporting documents would be invaluable."
Mr Bridgeman would like new powers to obtain documents both in merger and monopoly cases in the UK. On occasions when he acts in the UK on behalf of European competition authorities he already has powers to search and seize, which he called draconian.
But Mr Bridgeman said that if he had the powers in UK law to acquire documents, then they would be requested and provided through lawyers and "search and seize never becomes an issue. It is disclosure in other words - we would want the legal privilege to have documents disclosed and to form a view ... Anything that can get the job done quicker has got to be good." He would also seek powers to ring fence the activities of firms after a merger.
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