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3 REPORT To: COUNCIL Subject: MONKLANDS DISTRICT COUNCIL COMPANIES From: DIRECTOR OF ADMINISTRATION DIRECTOR OF FINANCE Date: 20 March 1996 Ref RT/AH 1. Introduction 1.1 Monklands District Council established various private companies, some who1 ly owned by the Council, some owned in equal shares with other companies. The relationships of the various companies are outlined below:- MONKLANDS DISTRICT COUNCIL I 100% OF I MDC (HOLDING) LTD THE TIME CAPSULE I MONKLANDS TRUST LTD 100 % OF I MDC (QUADRANT) LTD MDC (DEVELOPMENTS) LTD MDC (WINDOWS) LTD 50% OF THE QUADRANT CENTRE (COATBRIDGE) LTD MONKLANDS MDC (DOUGLAS HENRY BOOT LTD SUPPORT) LTD 1.2 The information upon which this report is based has been obtained from Monklands District Council and with the Council’s co-operation. 2. Legal Transfer of Ownership As from 1 April 1996, in terms of the Local Government etc (Scotland) Act 1994 and the Local Authorities (Property Transfer) (Scotland) Order 1995, Monklands District Council’s rights and obligations in respect of those companies must transfer to North Lanarkshire Council. Each company requires to have directors nominated by the Council and each company requires to appoint its own secretary. Slightly different considerations should be taken into account in respect of each company, as outlined below. 4 2 3. MDC (Holdings) Ltd This company is wholly owned by Monklands District Council. It does not trade, but acts only as a holding company for the Council's investments in the other venture companies. Originally, there were seven directors, Councillors Brooks, Cairns, Burns and Lucas, together with the Chief Executive, Director of Finance and Director of Planning. Councillor Cairns and all three officers are due to demit office at the end of March. In the case of the three officers one is going to local authority employment elsewhere and two are understood to be leaving local government service. The company secretary is the legal firm of Anderson Strathern of Edinburgh. The number of directors required must not be less than two. It is recommended that the Council consider (a) nominating Councillors to act as directors and (b) recommending that the role of secretary continue to be carried out by Anderson Strathern, Solicitors in respect of this company. 4. MDC (Quadrant) Ltd This company is a wholly owned subsidiary of MDC (Holdings) Ltd. It does not appear to trade and simply acts as a holding company for the Council's interest in the Quadrant Centre (Coatbridge) Ltd. Originally there were two directors, Councillor Brooks and the Director of Planning. The company secretary is the Director of Finance. Both of those officers are due to demit office when leaving local government service in the North Lanarkshire Council area. The minimum number of directors required is two. It is recommended that the Council consider (a) nominating Councillors to act as directors, and (b) recommending that the role of secretary be undertaken by Anderson Strathern, in respect of this company. 5. The Quadrant Centre (Coatbridge) Ltd 5.1 50% of this company is owned by MDC (Quadrant) Ltd and 50% by the Bank of Nova Scotia. Two directors require to be nominated by the Council: currently they are Councillor Brooks and the Director of Planning. The company secretary was the Director of Finance. 5.2 This company was set up because, as part of an overall development programme, the District Council had sold a site for retail shop units near the centre of Coatbridge to Rush & Tomkins Ltd (RTL). In 1990, RTL went into receivership, leaving unpaid debts due to the Council and the Bank of Nova Scotia. The Council and the Bank paid f3.1 million to acquire the site and the partially completed development, with a view to having the development completed, and eventually sold so as to recover the money originally put up by the Council and the Bank. 5.3 Monklands District Council, Scotiabank (Coatbridge Centre) Ltd, MDC (Quadrant) Ltd, The Quadrant Centre (Coatbridge) Ltd and The Bank of Nova Scotia Ltd entered into a joint venture agreement dated 15 May 1991 for the development, commercial operation and subsequent sale of the shopping centre known as "The Quadrant Centre Coatbridge Development". Paragraph 5.4 of that agreement stipulates "that two persons nominated in writing by each of the Joint Venturers will be appointed as Directors of the Joint Venture Company" which is known as "The Quadrant Centre (Coatbridge) Ltd". 5.5 Monklands District Council will be superseded as one of the Joint Venturers and the obligations to have such directors appointed now falls to North Lanarkshire Council. The persons nominated were Councillor lames Brooks and the Director of Planning, both as directors and the Director of Finance was appointed as company secretary. As noted earlier, both of those offices are due to demit office upon leaving local government service in the North Lanarkshire Council area. 5 3 5.6 The Bank of Nova Scotia is the Council’s partner in this joint venture company and shares the responsibility for its routine operations, such as arranging lets within the shopping centre, reviewing rents and negotiating with tenants. At a meeting of representatives of North Lanarkshire Council and of the Bank on 7 March 1996, the Bank’s representatives urgently requested that, not only for the legal reasons outlined above, but also to ensure the uninterrupted operation of the centre, North Lanarkshire Council consider delegating routine estate management powers and authority to appropriate officers and so allow effective joint working arrangements to be put in place before the end of March. 5.7 It is recommended that the Council consider (a) nominating Councillors to act as directors, (b) delegating to the Director of Administration the authority to have the role of company secretary undertaken by such officer as may be nominated by him, with authority to such officer to carry out any work required by the company under and in terms of the Companies Acts, (c) delegating to the Director of Finance the authority to nominate such bank signatories as he may consider appropriate and (d) delegating to the Director of Planning and Development the authority to nominate such officers as he may consider appropriate to facilitate and co-ordinate the Council’s functions relating to the company: all on the basis that the Council will treat those officers nominated to carry out work for the company as if it were work undertaken in the normal course of those officers’ employment and that the Council will indemnify those officers against claims against any or ail of them which might arise from or in connection with their work in respect of the company’s activities. 6. MDC (Developments) Ltd This company is a wholly owned subsidiary of MDC (Holdings) Ltd. Originally there were five directors, Councillors Brooks, Cairns and Smith, the Chief Executive and the Director of Planning. The company secretary is the legal firm of Anderson Strathern. Councillor Cairns and both of the officers are due to demit office upon their leaving local government service. The minimum number of directors required is two. It is recommended that the Council consider (a) nominating Councillors to act as directors and (b) recommending that the role of secretary continue to be undertaken by Anderson Strathern, in respect of MDC (Quadrant) Ltd. 7. Monklands Henry Boot Ltd This company is owned 50% by the Council and 50% by Henry Boot Inner City Scotland Ltd. In order to maintain the joint venture partnership the Council is recommended to nominate three directors to balance the number appointed by Henry Boot. It is understood that there are presently five directors, Councillors Burns, Cairns, Lucas and Brooks and the Director of Planning. The company secretary is nominated by Henry Boot ICS Ltd. Councillor Cairns and the Director of Planning should demit office at the end of March. It is recommended that the Council consider (a) nominating Councillors to act as directors and (b) recommending that the role of secretary continue to be undertaken by the present secretary. 6 4 8. MDC (Douglas Support) Ltd This company is owned 50% by the Council and 50% by Blythswood Estate Trustees and was set up with a view to developing the Douglas Support Estate adjoining the A8 between Newhouse and Bargeddie associated with upgrading proposals to motorway status. The Counci I should nominate four directors. Presently there are four directors, Councillors Brooks, Cairns and Smith and the Director of Planning. Councillor Cairns and the Director of Planning should demit office by the end of March. The legal firm of Anderson Strathern act as company secretary. It is recommended that the Council consider (a) nominating Councillors to act as directors and (b) recommending that the role of secretary continue to be undertaken by the present secretary. [ 9. MDC (Windows) Ltd This company was set up in 1987 to manufacture UPVC windows. Reports at an earlier stage have been submitted to the Construction Services Committee on the company’s operational and trading arrangements, it being intended that the company be wound up. The minimum number of directors is two. Presently there are four directors, Councillors Burns, Fitzpatrick and Smith and the Director of Finance. The company secretary is the factory manager. The Director of Finance should demit office at the end of March consequent on his leaving local government service in the North Lanarkshire Council area. It is recommended that the Council consider (a) nominating Councillors to act as directors and (b) delegating to the Director of Administration the authority to have the role of company secretary undertaken by such officer as may be nominated by him on the same basis as that outlined at Paragraph 5.7 of this report.
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