NO MONEY

Evening Post, Volume CIX, Issue 122, 27 May 1925, Page 9

NO MONEY

TO PAY LICENSE PEES

POSITION OF POVERTY BAY

MEAT COMPANY

REVEALED IN. A DECLARATION.

There were several interesting passages yesterday afternoon in. the course of tho proceedings of tho Royal Comission set up to inquire into the sale of the Poverty Bay Farmers' Meat Company to Vestey Bros., but the most interesting occurred" when Sir John Findlay, appearing for the Government, produced a declaration made by Mr. Lysnar in regard to the company's affairs in February of last year.

The Commissioners are Messrs. J. Alexander (chairman), A. M'lntosh, and G. Fitzgerald. Sir John Findlay, with him Mr. C. H. Taylor, is appearing for the Government, Mr. C. P. Skerrett, K.C., with him Mr. C. A. L. Treadwell, for the Meat Board, Mr. M. Mvers, K.C., with him Mr. T. C. A. Hislop" for tho .National Bank of New Zealand, and Mr. W. D. Lysnar, with him Mr. H. F. Johnston, for the Poverty Bay Farmers' Meat Company. When the Commission Tesumed, Sir John Findlay addressed a series of questions to Mi-. Jones.

Sir John: "Did you or your board giva the question of whether'consent should be given to tho transfer of the license tho fullest possible consideration before you decided that it should?"—" Yes."

"You got from tho bank a statement showing tho position of the Poverty Bay Company ?"—"Yes."

"You concluded from that statement that the company was hopelessly insolvent, and could not recover?"—" Yes, but that was not the main consideration."

Replying to further questions, Mr. Jones said that in his judgment Mr. Lysnar and his fellow-directors had had j every opportunity of stating their case. J Sir John: "You ask us to conclude that the matter got the fullest consideration before you arrived at the conclu- ! sion that tho sale should be permitted?" ■ —"Yes, the evidence in our opinion was sufficient to accept." - MR. NOSWORTHY'S. PART. "Has any fact been elicited during this Commission,' which, if you had known at tho time, would have caused you to alter your decision?"—" No." "Did you give the Minister of Agriculture (Mr. Nosworthy) tho benefit of what you knew of the company's financial position and other relative matters 1" —"1 told the Minister what had led up to the board arriving at its decision." "Mr. Lysnar suggests that Mr. Nos- j worthy was influenced by the big financial institutions aud refused to listen to the claims of the farmer. What was your experience in that connection?":— "Mr. Nosworthy was looking at the matter as Minister of Agriculture, ■ and was not influenced by any financial institutions." MR. JESSEP AND TRUSTS. James Simon Jessep, deputy-chairman of the Meat Board, said he had a fairly intimate knowledge of farming in the Gisborne district. He proceeded to outline the happenings leading up to the transfer to Vestey's, and corroborated Mr. Jones's statement that, the board had been unanimous on all matters throughout.

After a few preliminary questions, Mr. Lysnar asked: "You,have at all tunes favoured trusts, have you not, Mr. Jessep?"

Sir John Findlay protested that the question was an unfair one. It was like the • question: "Have you stopped kicking your mother?"

Mr. Lysnar (to witness): "AYe have had many discussions on trusts, have wo not?"

Witness: "Yes, many discussions, but we have always disagreed." "Did I not challenge yon to a public debate- at Wairoa?"—"l have no recollection of that."

Mr. Skerrett: "That discussion would never end, Mr. Lysnar." (Laughter.) Mr. Jessep remarks that the biggest discussion he had over had with Mr. Lysnar was when he (Mr. Lysnar) was holding up his wool at a. timo when the country had its back to the wall.

Mr. Lysuar: "You have no right to make a statement like that. It is quite improper."

WHAT IS A TRUST?

Later, Mr. Lysnar asked Mr. Jessep if he considered Vestey's was a trust. "I can say," said Mr. Jessep, "so far as I have seen evidence of Vestey's trading in Isew Zealand, I can't put my finger on anything that is not fair trading. Much as I would like to get them out of the way, being chairman of a freezing company in between their two North Island works, I can't say that Vestey's have been guilty of unfair trading." Mr. Lysnar persisted with his question as to whether witness considered Vestey's was a trust, but when asked to define what a trust actually was he declined to do so, stating that the public knew very well what a trust was. "Vestey's is a trust," said Mr. Lysnar, "and any similar organisation is a trust." Sir John Findlay suggested that it was a most difficult matter for anyone to define a trust.

. Evidence was also given by John Fraser, general manager of the Meat Control Board,, who outlined what had lieen done by the board in regard to the Poverty Bay Company and the Admiral Codrington. Witness a]so outlined the advantages ■ to the public generally as a result of the operations of the board. Ho stated that-the board had secured a reduction of £919,000 yearly in ocean freights, and there had also been considerable reductions in insurance charges, railway freights, and London charges. A SOLEMN DISCLABATION. The witness was examined by Sir John Findlay, who submitted to him the following declaration made by Mr. Lysnar, under the Stamp Duties Act, 1923, on 23rd February, 1021:—

I am chairman of directors of the above-mentioned company, and have held that office ever since the companywas incorporated. The nominal capital of the company is £500,000, of which amount £195,850 is unissued. On 13th

day of February, 1923, the company was indebted to the National Bank of

New Zealand, Ltd

in about the sum

of £350,388 15s 3d, and at the date of the sale hereinafter referred to owed the said bank a sum of about £300,-

000. On 3rd day of November, 1923, the said bank caused the company's land, buildings, and plant, and machinery affixed thereto to be sold through the .Registrar of tlie Supreme Court at Gisborne, and at the sale the said land, buildings, plant, and machinery wcro purchased by Nelson Bros., Lt k d., on behalf of Vestey Dros., Lid... for a gross sum of £217J000. I am informed that tho assets of the company are being sold by the receivers appointed by the bank to Vcstey Bros., Ltd., making up the total gross consideration to £225,000. Before the said sale receivers on behalf of the said bank were in possession of the stiid works, and since the said sole Iho snid Vestey I'iros., T.ld., have Wen in possession of the sai.J wui);f as vwucu thefcuf. The fonj^jaii^ 1 i|

no longer, carrying on business as a freezing company, and by means of the said sale has lost, with trifling exceptions, all its New Zealand assets. The directors of the company consider that tho company has lost over £1200,000 by reason of the said sale. There is a balance still due to the National Bank of New Zealand, Ltd., by the company of about £100,000 when certain creditors are allowed for. The bank has sent demands for payment of £120,000 to each of certain persons who had executed in favour of the bank a joint and several guarantee of tho company's account. The main reason why the company has not gone into voluntary liquidation is that it has an interest in the steamship Admiral Codrington, whose port of register is Glasgow, in the United Kingdom. The said ship is, however, subject to a mortgage to the Bank of Scotland for the sum of about £60,0C0. and under present conditions with regard to shipping it is not possible to sell her. At the present time the said ship is not trading to New Zealand, but is engaged in the carriage of goods between South American ports and England. The profits derived from such trading are .not being remitted to New Zealand. The main object, therefore, in keeping .the company still in existence is so that the ship can be sold when a suitable opportunity offers, instead 'of being sold by a liquidator at an inopportune time. In any event, it is plain that any surplus above the amount of the mortgage over the said ship will not be sufficient to discharge the balance due to the said bank. The holders of shares iv the capital of the company will not receive anything when the company eventually "goes into liquidation. On the 15th day of December, 1923, a special resolution of the shareholders o!' the company was passed reducing tho nominal capital to £130.350, and tin's was confirmed on the 31st day' of December, 1923. The resolution has not yet been confirmed by the Court, but it is proposed to make application to tho Court for confirmation of the reduction. The figure £130,330 is a purely arbitrary figure, and was arrived at by cancelling the shares that had been taken or agreed to bo taken by any person, and by cancelling all the capital that had been paid up prior to the-date of tlio resolution for reduction. Tho company has no funds with which to pay the annual license, and any moneys which it may possibly receive by means of calls or otherwise must at once bfi paid to the; bank. On behalf of the company I undertake immediately to notify tho Commissioner of Stamp Duties in tho event of the company resuming operations in New Zealand as a freezing company. And I make this solemn declaration conscientiously believing the same to be trvio and by virtue of the Justices of the Peace Act, 1908. (Signed) W. Douglas Lysnar.

Sir John referred to a conference which had. taken place between the Meat Board and Mr. Lysnar, and asked if Mr. Perry, the acting-chairman of the board, had confronted Mr. Lysnar with the declaration showing the hopeless financial position of the company. Witness: " That is so."

Mr. Perry pointed out that under such circumstances no contract was nossible?"—" Yes."

The Commission adjourned until this morning.