THE EXECUTIVE TRUST

Press, Volume LXXI, Issue 21436, 30 March 1935, Page 14

THE EXECUTIVE TRUST

I VIEWS OF DEBENTURE f HOLDERS | I COMMENT ON STATEMENT liY MR COATES Wli'DOM OF LIQUIDATION ! QUESTIONED iNIBSS iSSOCUTIOS 1 ELr.G HAM .1 ! AUCKLAND, March 29. The following statement was made by Mr H. P. Richmond, on behalf of the Investment Executive Trust debenture-holders' committee, regarding the statement made by the Rt. Hon. J. G. Coates in the j [louse of Representatives. j "The outstanding feature to me j is that there is nothing in the statement to show why the debentureholders should be forced to accept liquidation instead of reconstruction. Legislation may be desirable, (a) to protect the assets for the de-benture-holders and (bl even to apportion those assets lairly amongst the various classes ot debentureholders, in default of agreement amongst themselves. The debentureholders had always assumed that as the Government had already proceeded so far outside of the ordinary company law it. would, if necessary, assist the debenture-holders by such further legislation, if any, as might be agreed on after a full discussion of the views of the de-benture-holders, and the ment of their wishes in such manner as is readily available under the Companies Act, 1923. "So far as I can judge, no good cause is advanced in the statement issued by Mr Coates why the proposed statulory protection unci assistance', which is coupled with statutory liquidation, cannot be given equally well without liquidation by providing for a reconstructed company, in which the oebenture holders have absolute control. The views of a large body of deben-ture-holders in New- Zealand constituting an apparent majority, have so far been expressed as entirely against liquidation. They desire to maintain the framework of the Investment Executive Trust Company, but with entire control in their hands, not m the hands of the former directors. No opportunity in the last few days, with the exception of informal interviews, has ever been given to these debenture holders to present their views, although the existence of the organisation ef Iwldcrs. which is now recognised in the statement of Mr Coates, and the names of its secretary and counsel, have been well known to the Government for months. Position of Mr ,7. S. Barton, S.M. "The present statement is believed to be mainly the work of Mr J. S. Barton. S.M." whose valuable work is not unrecognised by the debenture-hold-ers, but whose views, particularly as he did not consult the committee, may not. necessarily be the last word. The exact status of Mr Barton in the matter is, and has been unknown to the debenture-holders, who had therefore no ground or basis on which to approach him. "It is matter of great regret to the committee that only this week, when matters had already been so far predetermined, were they given any inkling of the present drastic proposals. They feel that they and their counsel could have given very useful assistance in arriving at the plan which, whilst ensuring protective and helpful legislation, should not be so completely destructive of the Investment Executive Company, in which New Zealand debenture-holders are concerned, and the assets of which include a very big aggregate of valuable stocks and shares. Some of theso shares are those of New Zealand companies. which were perhaps not unnaturally disturbed by Mr McArthur's operations in obtaining such large holdings. The debenture-holders do not:, however, admit that considerations affecting these companies should affect their right to make the most of their assets, or their right, which has hitherto been unrecognised, to be consulted in their own affairs, and to choose between alternatives of liquidation, which many of them fear will be destructive of much they consider valuable, and reconstruction, which, with the Government's assistance, if necessary, they believe will give them a much better opportunity of avoiding loss. Debenture-holders' Wishes "If at this stage full and reasonable opportunity is to be given to the de-benture-holders to consider the position as stated by Mr Coates. and then to express their wishes and have them considered by a suitable tribunal without predetermined views, they can have only thanks to offer to the Government. It seems impossible to credit that there is already any irrevocable arrangement with the New South Wales Government under which liquidation will be enforced. If that arrangement did exist, it would be useless to communicate further with the debenture-holders.

"One thing I would emphasise, and (his is that there can be no possible need for forcing liquidation before the next session. Any protective legislation which is immediately necessary to preserve the assets and prevent dangerous activities can be passed, but the question of liquidation must, in common fairness to the debentureholders as the only persons whose interests are really involved, be left over until ample time has been given for consideration of the position as now presented. As the debentureholders are scattered throughout New Zealand this will entail, as the committee knows, from experience, at least a month of organisation, including the issue of circulars and the holding' of meetings.''