'PROTECT CLIENTS'

Auckland Star, Volume LXIV, Issue 204, 30 August 1933, Page 8

'PROTECT CLIENTS'

STOCK EXCHANGES. GOLD MINING COMPANIES. I MR. CREAGH'S WARNING. Urging the necessity for safeguarding the public, particularly in regard to the flotation of gold mining companies, the chairman of the Auckland Stock Exchange, Mr. Geo. C. Creagh, who is also president of the Association .of Stock Exchanges in Xew Zealand, brought several matters before members this morning. He commenced by stating that it was improper and contrary to Stock Exchange rules for a member to act as. secretary to a mining company. Another matter requiring attention was the practice of making reservations of shares in mining companies which were being promoted. Recently the Exchange- committee investigated a proposition, which stated that reservations could be made through any of the Exchange members. On making inquiries it was ascertained that out of a total capital of £00,000 the vendors were to receive no less a sum than £40,000 in cash or shares. He had since heard that the company had to pay an additional sum of £5000 for a freehold. Evidently the promoters wanted to be certain of getting some gold from the i public whatever might ultimately come out of the mine. Will History Repeat Itself? "In conclusion," continued Mr. Creagh, "I will add that if I am not very much mistaken we will see history repeat itself and, while many genuine mining propositions may be put before the public and much gold won during the next few years, in the long run there w;ll be a sadly disillusioned public and a large section of it who will rue the day that they were induced to put their money into gold mining company shares. "As Exchanges, therefore, it is my opinion that we should make it our business in every way possible, to protect the interests of our clients and save them from falling into the toils of the many unscrupulous company promoters who are to-day stalking the land. "I noticed the other day a paragraph in the papers expressing the opinion of the committee of the Dunedin Stock Exchange on this subject, an opinion with which I heartily agree."