NEW SCHEME OUTLINED

Press, Volume XCIX, Issue 29263, 22 July 1960, Page 14

NEW SCHEME OUTLINED

Explanation By Chairman (New Zealand Press Association) WELLINGTON, July 21. The chairman of the Capital Issues Committee (Mr P. L. Porter) tonight gave details of the relaxation of the control of papital issues. He said the Capital Issues Committee had given a general consent, from and \ including tomorrow, to any “issue of capital” to which the Finance Emergency Regulations 1940 (No. 2) applied except in any of the following cases, where prior application to the committee would still be required:— (a) Where proposed interest rates exceed the limits for the time being fixed in respect of an “issue of capital" of that kind. (The maximum rates fixed are 5j per cent, for mortgages, 53 per cent for debentures, 5? per cent, for registered unsecured convertible notes, and 53 per cent, tor preference shares plus participating rights if so desired); or

(b) Where an overseas company desires to commence business in New Zealand pursuant to regulation 10; or (c) For any “issue of eapital" to be raised overseas by a New Zealand company, and for any “issue of capital” to be raised in New Zealand by a company domiciled overseas, or for any “issue of capital” by a company whose principal business is the financing or discounting of hire-purchase or credit-sales agreements as defined in the Hire-Purchase and CreditSales Stabilisation Regulations, 1957, or any other form of credit sales, and any “issue of capital” by any company which is to be used either wholly or partly for the purpose of financing or discounting any such transaction. Those companies excluded from the general consent, i.e„ under (a), (c). and (d), he said, would still be free to operate under the £16,000 annua] exemption limit as before.

Companies which were proposing to make “issues of capital” pursuant to the general consent would not be required to submit applications to the Capital Issues Committee, but for purposes of record were to advise the commute of their intentions before making the issue. As the Finance Emergency Regulations, 1940 (No. 2) remained in force, it would still be necessary for all prospectuses issued pursuant to the general consent to be submitted to the Capital Issues Committee for approval before issue, Mr Porter said.