Directors’ advances not approved

Press, 11 December 1989, Page 15

Directors’ advances not approved

PA . Hamilton Tranzequity Holdings’ shareholders pointedly excluded loans to directors and other advances when they approved and adopted the company’s accounts at the annual meeting on Friday. They voted for a motion put by the managing director, Mr Max Hughes, that the directors’ report, accounts and auditors’ report for the year ended March 31 be adopted only as a record of the transactions that occurred, not as a possible approval under section 190 of the Commerce Act, 1955 of loans made to directors. That section of the Act

allows a company general meeting to retrospectively approve earlier loans made to directors. The resolution carried by shareholders specifically stated it was not seeking to give approval to any actions by the company in terms of Section 190. Earlier a shareholder, Mr Gary Trower, had questioned the "legality or otherwise in terms of section 190” of the writedown of advances to associated companies owned by directors, including the late Messrs Terry Lowndes and Kevin Ryan (both killed in an air crash outside Napier this year) and Mr Graham MacDonald, whose company MacDonald Mazda was put

into receivership earlier this year. The meeting chairman, Mr Max Hughes, told shareholders that, since publication of the annual report, Tranzequity had received a demand for $1.6 million. “It is alleged that Tranzequity Properties Ltd guaranteed loans to the MacDonald Motor Group,” said Mr Hughes. “The company has taken legal advice and it is not presently believed the company will be found liable for any part of this claim,” he said. Mr Hughes described as disappointing the group’s loss of $5,957 million for the year ended March 31. This had

comprised an operating loss of $2.98M and extraordinary losses of $2.96M. Major factors had been writedown of the property portfolio as a result of the weak New Zealand property market, writedown of the holding in Transmark Corporation and the write-off of prospective liabilities to guarantees and advances. Since balance date, Tranzequity had received S2M in life insurance on Messrs Lowndes and Ryan, sold S2M worth of commercial property, the Maramarua deer farm, a substantial holding in Transmark Corporation and opened Victorias Tavern in Hamilton which was trading successfully.