Legal block to flax industry take-over

Press, 4 October 1977, Page 4

Legal block to flax industry take-over

The only obstacle still in the way of the assets of the Linen Flax Corporation at Geraldine being taken over by private enterprise is apparently a legislative one. Mr B. A. R. Spence, chairman of a proposed company to take over the industry, said after discussions in Wellington between representatives of jus group and officials of the Crown Law Office and the Trade and Industry Department that there seemed to be no matters outstanding. His group was set to go ahead subject to legislation. There was a clause m the Liner Fiax Corporation Act. 1945. which precluded any business from

competing with the corporation. The act said that no company or other body with objects or functions similar to or identical with those of the corporation may be incorporated or registered. The act had to be amended and hopefully this might happen this week. Mr Spence said that his company would buy the assets of the corporation outright for $75,000. Pending rhe take-over, the Minister of Trade and Industry (Mr AdamsSchneider) had authorised the corporation to contract with growers for growing up to 240 ha of linen flax in the coming season.

A 240 ha crop would be similar in size to the last one. It was the new organisation’s aim to increase it considerably in the future. The average price of $45 per tonne for straw was also about the same as last year. Mr Spence said that objectives of the new organisation would be to increase the efficiency of the industry and to increase exports, particularly of tow and fibre, for w’hich the outlook was encouraging, although recent crop reports from Europe gave differing pictures. The establishment of a spinning and weaving unit was being stud.ed.