FCL bonus hint

Press, 9 November 1984, Page 16

FCL bonus hint

PA Auckland A bonus issue and a divi-dend-reinvestment scheme for Fletcher Challenge shareholders have been foreshadowed but the bad news is that these cannot take place before January, 1986.

FCL had to wait until its two preference share issues were redeemed, the chairman, Mr Ron Trotter told the annual meeting. Any bonus issue before that reduction in capital risked attracting tax, under present tax law. The dividend-reinvestment scheme would provide an option for institutions, in particular, to choose how to receive distributions.

But that was being said a day before a budget which could change the law. Predictably, shareholder

concern on the possible removal of tax-free dividends surfaced in questioning. Mr Trotter appealed for the Minister of Finance to treat tax “in totality". The double taxation of dividends saw some profits taxed in the hands of both the company and the individual. “I don’t think the scales have been fairly tilted towards equity investors in recent years,” he said.

Shareholders also learnt of a second share offer to employees before Christmas to “encourage ownership” and a deferred payment share-pur-chase scheme for management to ensure commitment.

More significantly, Mr Trotter revealed that a large number of directors and staff had individually funded purchases of “a substantial number” of FCL Shares in the campaign to improve the share

price since the profit announcement.

The meeting approved changed articles and the proposed $lOO million increase in authorised capital to $3OO million by creating 200 million unclassified 50c shares.

The 1985 annual meeting was set for Christchurch.