Long delay again criticised

Press, 12 October 1979, Page 22

Long delay again criticised

[PA Auckland; The decision of the Examiner of Commercial Practices, I (Mr A. E. Monaghan) to! refer the proposed take-over; [of McKenzies (NZ) Ltd, by I |L. D. Nathan and Company,; (Ltd, to the Commerce Com-; [mission, has raised further; criticism of the procedure. I I L, D. Nathan made its; ;offer in mid-June, and, at; ;the last count, 93.5 per cent! of McKenzies shareholders; had accepted the offer. The commission will begin; (its inquiry on November 14, i land its final decision is not' likely until December,} almost six months since the ( : first moves were made. > The President of the Stock! j Exchange Association of [New Zealand (Mr M. P.

:Hay) says that his executive: had discussed the matter jl I informally but would be tak It ling a much closer look at It ■th situation. In his view.it (the delay was unacceptable it (to the sharemarket. I The association would jc (look at the issue in its }broadest aspects, and might jt [express its concern to the t I Department of Justice, t (rather than put forward a[j (view to the Commerce Com-Is mission, Mr Hay says. It I The way the law operated |c (was incompatible with the;< I way the sharemarket oper-[ ated. In the present instance it no notice whatever was is 'taken of the position or It (wishes of the owners of the;t ness which was being's sold.

The interest of the shareholders is prejudiced, and; there is no accountability by} the parties responsible for; the delays, and the ultimate} decision, he says. The circumstances could} easily arise, he suggests,} where a six months delay in } a take-over bid could put; the target company out of; business. This would mean! an irrepairabie loss to the [ shareholders who owned the} business, apart, from the loss} of jobs, and other social; consequences. No commercial proposi-} tion, such as a take-over} should be subjected to} delays which were unreason-} able in not recognising that} a marketplace was involved. ; Representations might also}

■ have to be made with a’ view to having time constraints invoked in the interests of free enterprise,' {Mr Hay says. The director of the Auckland Chamber of Commerce (Mr A. T. Mortiboy) says! that the amount of time absorbed so far in the Nath-: ans/McKenzies take-over! has caused anxiety in the commercial world. Decisions were normally! made on straightforward; criteria. Mr Mortiboy says,! and although the "public interest” was a lot more ( abstract on which to compare a proposition, it was of great concern that there had (been such a delay. ( Mr Mortiboy believes that? departmental procedure (should also have regard to' commercial interests. When a decision was left in a sus-: pended state, it was not good for the company, nor [was it good for the morale; lof the workforce, which was; (involved in the decision. IMangement was denied the; 'chance to keep the staff; { fully informed, says Mr; iMortibov.