Perp. Trustees role as trustee not affected

Press, Volume CXV, Issue 33929, 23 August 1975, Page 19

Perp. Trustees role as trustee not affected

(A‘eu7 Zealand Press Association

DUNEDIN

The important role of the Perpetual Trustees Estate and AgencyCompany, of N.Z., Ltd, as a trustee for the debenture-holders of a number of major New Zealand companies appears in no way diminished bv the latest legislative moves affecting the Dunedin trust company.

This was made clear last night by the Government-ap- I oointed chairman (Mr S. J.| R. Chatten) when he was' asked about this aspect of the company's business. Although full details of the company’s involvement! in this area of business are; not readily available, it is I known that the company' acted as trustee for oeben-i ture holders or note-holders, in a number of major com-' panies. Mr Chatten said he was entirely satisfied that the company’s chief executive

and his staff had the quali-, Ifications and experience to; ;carry out their responsibilities in relation to their; role as trustee for debenture' holders. He also pointed out that! the Government-appointed board had also had much ex-j iperiesnce in this area of institutional finance super-1 i vision. The role of trustee for de-1 benture or noteholders is es-l sentially one of a “watch-' dog" or auditor protecting' the interests of those who: have advanced a company; funds under conditions laid down in a trust deed. The principal duty of the: trustee for debenture holders; was to see that the company i over which the debenture iwas secured, adhered to the

•(Conditions and ratios as set > out in the trust deed. Although it was usual for i trustees operating in this rarea tv be leading financial institutions, the prime requirement was one of exll pertise and experience rather ■’than financial backing. Trustee for debenture I holders must be prepared to act and if necessary bring; ■lactions on'the behalf of debenture holders, but the recourse of debenture holders [lto the trustees would occur ’[only in a situation of negligence on the part of the ■ trustees. While the Trustee Cominanies Management Act (passed last Thursday night made no particular reference! ilto the role of trustee for debenture holders, it could be • presumed that the morato-j Irium section of the Act does (cover this aspect of the! (trustee company’s business. I Under the moratorium section the power to appoint a new trustee cannot be made without the consent of the Court or the board of the trustee company. However, Mr Chatten considered that the protection [of the Act would hardly be j necessary since the Pe’rpet- ’ ual Company’s executives and board were quite capable of fulfilling their duties; las trustees for the debenture; holders in companies in I which they had obligation! and responsibility.