SIR JULIUS VOGEL AND THE TELEPHONE COMPANY.

Press, Issue XLI, 25 February 1885, Page 6

SIR JULIUS VOGEL AND THE TELEPHONE COMPANY.

AUCKLAND, February 5. Sir Julias Togel forwards the following >mmunication to the "New Zealand Lerald" concerning his connection with tie Consolidated Telephone Company I— To the Editor.—Sir,—l am in receipt of he second report of fcveefagating lommittee of the Consolidated Telephone lompany, and I send you a copy of it, toether with one of the first report. It was a reference to the second report that tne elegram; appeared from the 3 iation in which it was stated that the Jompanyf intended to sue mc for the 'enormous profits" I had .made. The nalice of the telegram is evident* because lothing appears in the report about 5 enormous profits," t*Mne the^eafaeme 'erentiafiy admits that /did notrealise. As t states that sales took place over a long wriod previous to the. high rates, the mounts could not be designated enormous. to, a matter of fact, though I have lot particulars with mc, I am certain that. ■it prffi on the whole of my 3330 shares lid not exceed or even amount to £700. The first report statee that I was allotted LSOO sharesTand second that I allotted myself 3330 share 3. Both statements are incorrect. I did not allot any shares to myself. I indicated my wish to take 3330 Shares, and the Board allotted them to mc I was not, to the best of my belief, on bhe Committee of allotment. I may_have been and probably, was at the Board meeting which confirmed, the Commitwork. The shares in the Company were applied for nearly six times over, and when it was decided not to allot prorata, it was of course necessary to make the allotment by arbitrary decision. I had been engaged in lengthened negotiations for arranging terms of power's jale, and but that 1 was going on the Board I would have been entitled to, .and could have claimed, a large commission;. and the Board, recognising my exertions, paid mc the compliment of allowing mc to name those friends amongst applicants to whoml desired allotments to be made, to an amount, including the. shares I took myself, of 1500. Lao Tiot thMit I fidly aTMled myself of the privilege ; but, if I did, what possible objection could there be? Is.it not a common practice for Directors to indicate those of their friends amongst the applicants to whom they wwh allotments to be made P The general complaint against Companies is that the Directors do net take a sufficient interest in them. I gave the best possible guarantee of my opinion of the Company's prospects, and Burely out of 15,000 shares it was not excessive to ask that the applications of my friends to the extent of less than 12.000 shares ehouldbe granted, besides 3800 to myself. Then it is alleged that the allotment to mc was informal, because my application was only for 1000 shares; I believe it is a common .practice for Directors not to send in applications, but to indicate at meetings of the lioard prior to allotment how many shares they wish. The thing happens everyday,, application and allotment-money being paid in one. I have no : memoranda, with mc, but it may be that my initial application before allotment was considered was for 1000 shares only, but it v stated that the application number was altered from 1000 to 5000. I am quite certain that this was not done by my directions, and it is evident th*t no one could have made the alteration without an authority to warrant it. If the application for the other 4000 cannot.be found it m probably mielaid. As I must have paid application and alletment money for the shares, what object could I poaaibly have , in not signing an application ? The Beport states thattheßoardare advised by Counsel that they have grounds of action agauro mc, but the facts were not correctly stated, and 1 am advised that they have no case, or if they had it would be a very technical one, and would .involve the disturbance of many other allotments. The report makes a point of a circularsent out by the Directors in December, 1881, stating that they expected to be able to continue to pay dividends at the rate of 10 per cent. At that time their prospects folly warranted the statement. There seemed to be five years of such dividends m Tiew from several contracts, apartfrom the ordinary business of the Company as sole licensed manufacturers of telephones in Great Britain. It would serve no purpose to inflict on your readers an explanation of how the Post Office most unexpectedly exercised a right to withdraw from the major portion of its contract, and how a second contract was compromised for a small payment These disasters occurred during my last visit to Australia, and when I retained to England the Company, which I left as I thought in a brilliant position, was surrounded with difficulties. It appears now from the report of the Committee that the Company has lost a quarter of its capital — about £60,000 — which is much less than the value of the contract with the Post Office so unexpectedly upset, and for which a large consideration was paid. It is proposed to write oft 5a in the pound, but the shareholders have received 33 in the pound by way of dividend, so they lose onlySs in the pound, and interest up to date. It is expected that the Company will pay a dividend this year, but I cannot further pursue this subject of the Company's affairs without unduly trespassing on your indulgence. Ithinklhave said enough to show you that the question between the Consolidated Telephone Company and myself is in thenature of a pnrate dispute that does not concern the pablic, and that it was a cruel thing of the correspondent to telegraph about the report, knowing as he did that until I received it I had no means of replying to his unfair representations of what that report contained. , lam, &c., Julius VOGEii. February 2nd, 1885.