FORFEITED SHARES.

Dominion, Volume 4, Issue 11110, 6 May 1911, Page 8

FORFEITED SHARES.

PROPOSED AMENDMENT OF THE LAW. ißy Telegraph.—Special Correspondent.!

Auckland, May 5. A discussion took place at the Stock Exchange to-day on the salo of forfeited shares by auction.

Mr. Creagh moved: "That tho committee bo instructed to confer with the legal managers of mining companies upon the whole matter with a view to taking action to ha.TO : the law relating to the disposal of forfeited sales amended." Mr. Creagh said tho present system undoubtedly lent itself to all kinds of swindling and dirty work. Mr. Vincent Allen seconded the motion. Mr. P. Hull said that the system of selling Ghares at auction in large parcels for nominal prices was against the interests of honest investors. Shareholders were not likely to go on paying calls to develop properties when they found that perhaps forty or fifty thousand forfeited shares had been sold by auction at Is. per thousand. That sort of thing neither benefited tin! industry, the company, nor tho legitimate investor. It was quite possible for tho purchasers present at an auction to combine to pick up the whole lot of shares at a, nominal figure and divide them round afterwards. They must see that the present system was eimply killing the business.

Mr. -Hull said ln answer to Jrr. Thorns the trouble was if ho went to auction and bought 50,000 shares at Is. per 1000, it would moan that Francis Hull was liable for whatever calls might be made, but these shares were sold to people who were not worth two glasses of beer, and if they managed to peddle off the lot at a halfpenny per snare before the nest call was made well and food, and if they were not guccessful in doing that they could forfeit again, as they were worth nothing. The calls could not be recovered Mr. i Vincent Allen said it was almost inconceivable to him that anyone should defend the present syGteui of selling shares by auction. If ho was to state in plain language what he thought of practices resulting therefrom, he would soon be pulled up by the chairman. Mining as an sucTn^h C ot ainly <lid DOt bmefit fr ° m The discussion was adjourned.

With a, view to the encouragement of the shipbuilding industry in Japan the new tariff, which takes effect in July ncx , provides that the duty on the inl !'f ine°!s to'bJin^ase^fro'm 0 ad valorem to £1 10 s . per ton cross This" will consideraby restrict tho sale of second-hand ships of the typo that has hitherto been most freely bought by Japanese owners, and, in anticipation of ho tax, there are at present a, largo number ot inquiries in the market from firm" in Japan for obsolete tonnage. While the now law will operate to tho disadvantage of foreign Kellers, the expense of runnine Japanese, steamers will, as a resul t b? greatly increased, for a time at least on account of the first cost. '