Mosgiel now goldmine

Press, 4 April 1989, Page 37

Mosgiel now goldmine

PA Dunedin Thousands of dollars would lie unclaimed in a trust account and might finally be taken by the Government unless the many missing shareholders of Mosgiel, Ltd, woke up to their good fortune, Mosgiel’s manager said. The former giant of the New Zealand textile industry came out of receivership late last year and a sizable sum is being built up by the former receiver, Tony Anderson, now manager of the company.

Mr Anderson was able to use a tiny subsidiary, Mosgiel Textiles, Ltd, which was not in receivership, to use $13.5 million of tax losses from its parents in the operation of a finance company, which netted $4.5 million for the fortunate shareholders.

Another seven-figure sum is likely to be added to that

figure by the sale of the Roslyn Mill, Mosgiel’s only outstanding asset. The mill goes up for auction on April 28.

The Government valuation was $1.5 million, though he did not want to put figure on the final bid, Mr Anderson said.

The mill could be sold as one lot or in three separate pieces, he said, two others already having been sold to Otago Pinecraft, Ltd, for the expansion of its woodworking factory. “There is no reason why blocks 3, 4 and 5 should not be sold as one piece," he said. “We are still getting a good rent flow from it, but it has wide industrial zoning permission so there is potential for development.” After the mill is sold the directors, who resumed con-

trol after the company came out of receivership, have to decide on a future course.

A distribution of capital was the most likely solution, Mr Anderson said.

“We have 2500 to 3000 shareholders and we don’t have a business which could sustain that kind of organisation. It would be very complex and costly to, administer,” he said. By law those shareholders would have to be notified twice a year on the company’s position, an annual meeting would have to be held and an audit paid for. There would be the cost of printing, postage, audit fees and secretarial work.

So the directors were taking legal advice on the most effective way to wind up the company, Mr Anderson said.

Unfortunately, 15 per cent of the shareholders had not been tracked down and in the event of a winding-up, a substantial sum could not be distributed immediately.

This would have to remain in a trust account until such time as it was claimed, Mr Anderson said.

Eventually, if it was not claimed, it would be taken by the Crown.

Mosgiel was placed in receivership in 1980 and many shares were traded, some for as little as 2c. Although attempts were made to keep the register of shareholders up to date it is obvious that many sales were not notified.

In cases of genuine loss there was a standard Stock Exchange procedure for claiming ownership, Mr Anderson said.