POWERS OF COMPANIES.

Auckland Star, Volume LX, Issue 43, 20 February 1929, Page 4

POWERS OF COMPANIES.

STATE INTERFERENCE. At yesterday's meeting of the Auckland Chamber of Commerce, attention was given to a striking indictment of legislation passed by the late Government in connection with the Rural Intermediate Credit Act. Mr. Alfred Coleman, of Stratford, had written very fully to the Associated Chambers of Commerce in connection with a clause in that Act, whereby sureties under the Act undertake if answer for the default of the borrower, Under this provision any company ma;.. ''notwithstanding anything to the contrary in its memorandum or articles of association, guarantee the repayment of any loan granted under this part of the Act, or the payment of interest in any such loan." The effect oi; this sub-section. Mr. Coleman points ont, is most serious, and strikes a blow at the fundamental principles of company law. ""Further."' he added, "this legislation, besides being illogical and unscientific, is unjust, auU interferes with the hitherto undoubted rights of company shareholders and creditors." Investors in companies, he said. were being robbed of the protection usually given and expected. The contract between companies and shareholders was definitely interfered with. The council has referred the matter to its Parliamentary and Taxation Committee for a report.