Shareholders Dispute Discount Abolition

Press, Volume CIX, Issue 32232, 26 February 1970, Page 12

Shareholders Dispute Discount Abolition

Small shareholders in Hay’s-Wright Stephenson, Ltd, are concerned about the abolition of their shareholders’ 5 per cent discount on purchases in Hay’s-Wright Stephenson stores.

Mr J. F. Wilson, a Christchurch shareholder, had by yesterday collected twothirds of the signatures

necessary to have the directors convene an extraordinary meeting. The intention of the petitioners will' be to alter the company’s articles, taking the decision on the discount out of the directors’ hands. There were moves at the fiery annual meeting in November to reverse the directors' announced decision to abolish the discount, but the proposals were reduced to a motion requesting the directors to reconsider it. Nevertheless details of the abolition dates were sent out to shareholders with their dividends after the meeting.

In a circular to shareholders in December, the directors said they had confirmed their earlier decision. The discount had become an expensive concession as the company had grown, it was costly to administer, and the net profit before tax last year was only 3.4 per cent of Hay’s sl2.sni turnover. They told shareholders also that many shares were held by institutions which could not benefit from the discount.

Wright Stephenson and Company, Ltd, last year acquired 41 per cent of the shares of the merged company, and its chairman (Sir Clifford Plimmer) has now succeeded the late Mr S. E. Mair as chairman of Hay'sWright Stephenson. Mr Wilson told “The Press” yesterday that the directors had said at the annual meeting that the discount was costing the company $15,000 a year after tax.

This was a small amount to lose in dividends, he said, in contrast to the cost of the 121 per cent staff discount scheme throughout all the Hay’s-Wright Stephenson outlets. Small parcels of the company’s shares have been trading at easy prices since Christmas.