"LYTTELTON TIMES' COMPANY.

r « I MR T. W. MAUDE'S ESTATE. J MR MALET'S STATEMENT. j TO THB EDITOR. Sib, —l forward herewith copy of a de. claration made by me to-day, the original of which I have sent to the Official Assignee in Bankruptcy. This documeni refers to the anonymous statement laid before the meeting of the creditors in this estate on the 29th "nit. by Mr Wilding, solicitor. Aa the statement referred tc appeared in the columns of the Lyttelton Times, may I ask you to extend the same consideration to me, and to publish the • enclosed, together with this letter ? I ask the author of this anonymous . document to send me his* name. Any person who makes a statement of that nature anonymously is bound, in common fairness, to declare himself. I alßo appeal , to Mr Wilding, solicitor, who read the : anonymous statement to the meeting, and 1 is reported to have said that "it had been 1 supplied to him by a gentleman on whose • accuracy implicit reliance could be placed," to supply me with the name of the author. ■ I may say that on the same day as this i anonymous document appeared in the publio prints, a letter was written on my 1 behalf to the Official Assignee, asking for an early appointment, in order that I 1 might go before him and submit myself ■ to examination by that officer or any . creditor. I court the fullest enquiry into all my dealings and transactions with the Lyttelton Times Company, Limited.— l am, &o.i F. de C. MALET.

[Enclosube.] In the matter of "The Bankruptcy Act, 1892," And In the matter of the estate of Thomas William Maude, of Chrietchurch, solicitor, a bankrupt. I, Frederick de Cabtkbet Malbt, of Christchurch, do solemnly and sincerely declare as follows :— 1. I have seen the statement published in the newspapers on the 30 th of March, 1893, and read by Mr Wilding, solicitor, at the meeting of creditors in the estate of T. W. Maude held before the Official Assignee in Bankruptcy. Mr Wilding is reported to have said— " He had a written statement which he believed to be accurate. It had been supplied to him by a gentleman on whose accuracy implicit reliance could beplaced." The statement was typewritten, anonymous, and not dated. 2. In view o! the publicity that has been given to the statement above referred to, I deem it necessary to state shortly the history of the Lyttelton Times Company, Limited, and my connection with it. 3. In 1867 a partnership was entered into between Crosbie Ward, William Reeves, William John Warburton Hamilton and Thomas William Maude, who carried on business under the title of " Ward and Eeeves." After the death of Mr Crosbie Ward, and in 1881, the three surviving partners formed their business into a private Company, under the name of the Lyttelton Times Company, Limited, and the shares were held as under : — SHAEBB. William Reeves 2175 W. J. W. Hamilton ... 1476 T.W.Maude' 771 J. C. Wilkin ... ... 65 JohnHebden ... ... 6 E. C.'Eeeveß 5 R. A. Loughnan 2 4500 making up the number of seven shareholders as required by statute. 4. The original directors of the Company were W. Reeves, W. J. W. Hamilton and T. W. Mande, who, the articles provided, should hold office from 1881 to 1888. The qualification for the directorate was the ownership of not less than 400 shares. It was also provided that no shares should be transferable without the consent of all the Directors. Every share carried one vote except that.no shareholder could exercise more than 1800 votes. 5. The Managing Director of the Company, the late Hon W. Reeves, died on the 4th of April, 1891, leaving Mr T. W. Maude the sole surviving Director of the Company. .6. Mr Maude having made arrangements prior to Mr Reeves' death to leave the Colony for England in the middle of April, asked me in April, 1891, to undertake the management of the Company, which I agreed to do. 7. In order to qualify me as a Director Mr Maude transferred his shares to me. The departure of Mr Maude was delayed until the 16th of May, 1891. 8. On the 14th of May, 1891, I was appointed by the Direotors Managing Director of the Company, which office, as well as that of a Director of the Company, I resigned on the Bth of March, 1893. TJp to the 31st March, 1892, I received remuneration at the rate of £150 per annum, and from that date to the 28th of February, 1893, at the rate of .£3OO per annum. 9. I will now refer to particulars of the anonymous statement read at the meeting of creditors by Mr Wilding, and upon which the creditors acted. 10. It is alleged that Mr T. W. Maude made an agreement giving me the option of purchasing 100 shares, to be exercised at any time within four years. There is an agreement with Mr Maude whereby I have an option to purchase 100 shares in the Company at the price of £3 15a 6d per share, exercisable within a period of five years from the 31st of March, 1892. This option was given to me in order to secure my qualification as a Director of the Company during the term for which I was to hold office as Managing Director. The price of £3 15s 6d was fixed because it was at that figure Messrs Harper and Co. and Mr F. J. Kimbell had previously given to MrW.B. Perceval and myself the option to purchase the shares (2120) in the Company formerly belonging to the Hon W. Reeves, but transferred by him during his lifetime to Mr F. J. Kimbell [the mortgagee of Harper and Co.], who was the registered proprietor. Thatpriee(£3lss 6d per share) represented the amount Harper and Co. were prepared to take on account of the sum due by the estate of the Hon W. Reeves to the firm. I did not consider the shares worth the money, and I therefore declined to exercise this option under the agreement with Harper and Co., and as the option expired on the first of May, 1892, 1 accordingly entered into the above arrangement with Mr T. W. Maude to secure my qualification. I should add that the shares that belonged to the late Hon W. Reeves were, after his death, valued for probate purposes at the sum of ten shillings per share. 11. The anonymous statement says that in April, 1891, Harper and Co. were admittedly insolvent, and that I was aware ; of the fact. I was not aware of the fact. I had ] heard rumours about their financial position, but I had no means of judging whether such rumours were correct or not. 12. The same document slates : — 1 "About this time— April, 1891— Mr Leonard Harper was in England, and it appears that Mr ■ Maude, with the assistance of his son and Mr Malet, set about making certain alterations in the articles which have materially nifected the market value i of the shares. Mr Kimbell left the Colony, and , although Harper and Co. were his solicitors and , prepared his power of attorney, Mr- Maude was • made his sole attorney. The old Articles provided that until otherwise ordered by the Directors , Messrs Harper and Co. should be the solicitors of the Company. In April, 1891, Messrs Harper and ■ Co. and Mr Maude were possessed of or interested i in 2797 shares. Mr Maude, as executor, was also ; owner of 1076 shares and of 55 more jointly with Mr Ee ,? v . e L s - *£, th % alteration of the Articles the • solicitors of the Company were not employed, and; Mr Geo. Harper, it is believed, was not aware of what was being done by Mr Maude. , Mr Maude then with the assistance of Mr Malet and his solicitor, Mr F. H. Bruges I caused to be prepared an entirely new set of articles, which were submitted to, and passed by a meeting • of shareholders. There could only have been pres- > ent at such meeting Mr Maude, Mr Malet, Mr $ Wilkin and perhaps one other small shareholder. Three- constituted a quorum, (See regulation 24.) The » Hew articles made the following important changes : I , ■ — 1. No share shall be sold to a person who is not a i ' shareholder, the value or price thereof to be detere ' mined by the auditor of the Company appointed and 1 , removable by the Directors. It will be seen there. • fore that having regard t<x present oircumstanoes

£s**o the share list there is no one shareholder «^S^-S? C , 0 ? 0 or *° aWe to bn y Bhares unless KBe Mr Malet or Mr Thomas Maude jun. 2. Extensive powers of forfeiture of shares were given to the Directors. No power existed under old articles. « is believed that this change was made in view of the anticipated bankruptcy of Harper and Co., and in anticipation that the shares would be allowed to lapse for non-payment of the calls which were subsequently made." Mr L. Harper was in the Colony in April, 1891, and did not leave it till July, 1891. 13. On looking into the affairs of the Company shortly after the death of the late Hon W. Eeeves the Directors came to the conclusion that it would be in the interest of the Company to make alterations in the articles of association. This conclusion was forced upon the Directors in consequence of difficulties that had arisen in connection with the administra- j tion of the Company, which Ido not feel j myself at liberty to disclose in a document of this nature. There was, moreover, the question of one member of the Company i holding such an extensive power of voting I as had hitherto existed. j Instructions were given to Harper and Co., solicitors, to prepare fresh articles of association. I was informed by Mr T. W. I Maude that he had instructed Mr George Harper to draft new articles, and they were submitted to the Directors for approval. ! After Mr Maude had given his instructions : Mr George Harper left for Wellington, ! and it was considered advisable that the draft should be settled by counsel. The ! account rendered by Meßßrs Harper and i Co. to the Lyttelton Times Company for | drawing the articles, attendances and work | incidental thereto was for £52 10a, and ; was paid on the third day of March, 1892. i This account included two other comparatively very small matters. It appears from the account that instructions were given to \ Messrs Harper and Co. on the 20th of April for fresh articles of association, and that on the 7th of May they were informed by Mr Maude that Mr F. H. Bruges would act as counsel. While the articles were under consideration the question as to the insertion in them of what is termed the "pre-emptive clauses" was considered, and it was decided to adopt them for the following reasons :— (a) That the Company was, in face, a continuation of the old partnership, which had been converted into a limited Company for the convenience of the partners, and that the remaining partners should have the option of purchasing the interests of the retiring partner at a fair value. (6) That in the original partnership deed, between the proprietors of the business before it was formed into a Company, there was a clause to the same effect as the "pre-emptive clauses." (c) That if any shareholder was willing to purchase the shares of an outgoing shareholder at a fair value it would prevent the introduction to the Company of persons who were engaged in a similar enterprise, or who desired to bring about a change in the politics of the papers published by the Company, or the ultimate extinction of the Company. (d) That the Direotors were advised that the "pre-emptive clauses'* would tend to secure the objects above-mentioned, and were to be found in the articles of association of Companies that partook of the nature of private companies. 14. The assertion that " no share shall be sold to a person who is not a shareholder " is incorrect and misleading. The article apparently alluded to is as follows :— "No share shall be transferred to a person who is not a shareholder so long as any shareholder is willing to purchase the same at a fair value." The important distinction is at once apparent. 15. No alteration was made in the appointment or removal of the auditor of the Company by the new articles. 16 As to the assertion that — " Having regard to present circumstances and to iie share list there is no one shareholder likely to >ecome or be able to buy the shares unless it be Mr Malet or Mr Thomas Maude, junr.," I would point out that the " pre-emptive clauses" give the option of purchase to any shareholder of the whole or any part of the shares of an outgoing member at a fair value before they are offered to the publio. 17. The powers of forfeiture for non-pay-ment of calls, which is a common and ordinary provision in articles of association of companies, were not in the old articles of association, and the Directors' attention having been called to the fact the usual clauses were inserted. 18. The assertion in the anonymous statement that the change was effected in view of the anticipated bankruptcy of Harper and Co., and in anticipation that the share? would be allowed to lapse for nonpayment of callß, is without any foundation whatever; in fact the decision to alter the articles was arrived at for entirely different reasons. At no time do I re* member the financial position or possible bankruptcy of Harper and; Co. to. have been mentioned in connection with this matter. 19. The articles of association were finally passed on the 26th of June, 1891, and the call was not made- until the 17th of May, 1892, and would not have been made then but for reasons which I will give later on. 20. As regards the alteration in the qualification of a Director from 400 to 100 shares, the Directors considered the then existing qualification excessive and unusual. Nine pounds had been paid up on each share. 21. With reference to the assertion— II It was provided that no trustee for any bankrupt shareholder should be eligible as a Director. This it is conceived shows that the bankruptcy of Harper and Maude was contemplated, and was inserted to prevent the- Official Assignee acquiring a position of control." The accuracy of this statement can best be tested by comparing the two articles which I will quote. Article 43 (old Articles) runs :— " Every shareholder holding not less than four hundred shares shall be eligible as a Director, provided that all calls made on his shares shall have been paid. No trustee for any bankrupt or insolvent Shareholder shall be eligible as a Director." Article 89 (new articles) is as follows : — " Every shareholder holding not less than onehundred shares shall be eligible as a Director, provided that all calls made on his shares shall have been paid. No trustee for any bankrupt ovinsoU vent shareholder shall be eligible as a Director." The words are identical. 22. It is alleged in the anonymous statement there could only have been present at the meeting o! shareholders; at which the new articles were passed, " Mr Maude, Mr Malefc, Mr Wilkin, and perhaps one other small shareholder." There were actually present at the meeting of shareholders on the sth of June, 1891 :— Shares. F. J. Kimbell, in person, representing 2120 Thomas Maude, in person, representing 404 H. S. Brown, in person, representing 91 W. B. Perceval, in person, representing ... .4. ... ... 1 F. de C. Malet, in person, representing ... ... „. ... 677 J. C. Wilkin, in person, representing 65 Richard M. Hamilton, by bis proxy, F. de C. Malet, representing ... 401 Thomas W. Maude, by his proxy, F. de C. Malet,. representing ... 671 T. W. Maude and W. P. Eeeves, joint holders, by proxy, F. de C. Malet, representing 55 Total shares represented ... 4488 leaving only 12 out of 4500 shares unrepre •anted. At the meeting of shareholders held on the 26th of June, 1891, to confirm the articles, the following shares were represented :— Shares. F. de C. Malet, in person, representing 677 F. Ji Kimbell, in person, representing 2120 Thomas Maude, in person, representing 404 K. M. Hamilton, in person, representing 40Z H. S . Brown, in person, representing 94 J. C. Wilkin, in person, representing 65 j T. W. Maude by his proxy, F. de | C. Malet, representing ... ... 671 j T. W. Maude and W. P. Eeeves, by I proxy, F. de C. Malet, representing 55 Total shares represented ... 4487 Leaving 13 Bhares unrepresented out of j 23. Mr T. W. Maude had, previous to his departure from the Colony on the 16th of May, isgi, been present at meetings of Directors, and had approved of th© article* ,

as they were finally passed at the meeting of shareholders. ; 24. It will thua be seen that Mi P. J. Kimbell was present when the articles were passed, and, in fact, did not leave the Colony till June, 1892. The resolutions . adopting the new articles of association I were carried unanimously at both meet- ■ in RB- -| 25. It is farther alleged in the same ; anonymous document that — i "The Directors waited until Harper and Co. w ? re n ?.P elessl y insolvent before making the call. Ihe call was not paid by Harper and Co. at due , wSddlta forfeiS- OrSgaVe noticetLat the shares { At a meeting, at which all the Directors ; were present, held on the 17th of May, : 1892, a notice signed by Harper and Co., i solicitors for the mortgagees (Baker's i trustees) over the property of the Company for .£6OOO, was read, to the effect that the mortgagees required pajment of the mortgage money. The financial position | of the Company was carefully considered, and in view of the amount due to the mortgagees and the other liabilities of the I Company, it was unanimously resolved that a call of £1 per share be made. 26. Some days before the meeting of Directors, Mr T. W; Maude and I waited on Mr George Harper— Mr Leonard Harper being then absent from the I Colony — and had a long conference with i him, when we laid the financial position :of the Company before him. This was I done in view of the fact that Harper and ! Co. would be the largest contributors in i cash of the call. Mr George Harper agreed with the necessity of a call, and at his suggestion and in order to meet the convenience of his firm, its payment was I extended over a period of seven months in four instalments of five shillings each per share. 27. Ib ia imputed that the motive for making the call was to work a forfeiture of the 2120 shares for non-payment of the call. Had that been the object of the. Directors, as the articles provide that fourteen days notice only need be given before a call becomes payable, the Directors would not have made the call payable by instalments, or have extended the payment of it over a period of seven months. 28. Before this date, in or about the month of July, 1891, Harper and Co. had transferred their interest in the shares (subject to the mortgage to Mr Kimbell) to the Hon J. B. A. Acland and Mr C. G. Tripp, who now claim to be the owners of the shares. 29. Owing to the fact that some of the shareholders of the Company were also depositors with it the call only realised in cash £2253, of which £2120 was contributed by persons representing the 2120 shares now claimed by Messrs Acland and Tripp. 9 \ 30. The mortgage to Baker's trustees was paid off early in October, 1892. Arrangements were made with, the bank to find the balance of the amount of £2253 that would be provided by the call which waß not then completely due. I found the remainder, £3750, and took security over the property of the Company for that sum and £600 due by the Company to me, which latter amount was unsecured. The rate of interest on the loan of £4350 was 6 per cent per annum. This loan was paid off in February, 1893. 31. The time for the payment of the two last instalments of call on the 2120 shares was extended for two months, but delays having arisen in payment of the last instalment, it was found necessary to press for payment. ■ 32. A letter was written on- the 21st January,, 1893, to Mr F. J. Kimbell (the then registered proprietor), through his attorney, calling his attention to the non-payment of the instalment of call due on the 31st of December, 1892, and informing him the Company would proceed to enforce payment thereof unless the amount was paid within seven,, days,.. and. pointing .out that non-payment, would entail a forfeiture of the shares. The call was paid. 33. I have abstained as far as possible from commenting upon the anonymous document read at the meeting of Mr Maude's creditors by Mr Wilding, and received and acted upon by the Official Assignee. . And I make this solemn declaration, conscientiously believing the same to be true, and by virtue of the provisions of an Act of the General Assembly of New Zealand, intituled "The Justices of the Peace Act, 1882." (Signed) F. db C. MALET. Declared at Chriatchurch this third day of April, 1893, Before me . ; (Signed) Richmond Beetham, •' A Justice of the Peace for the Colony of New Zealand. :