TRUST COMPANY

Evening Post, Volume CXIX, Issue 134, 8 June 1935, Page 14

TRUST COMPANY

MINISTER'S COMMENT

REPLY BY DEBENTURE-

HOLDERS

A statement is made by Mr. Norman Levy, Wellington District representative of the Debenture Holders' Committee of the Investment Executive Trust of New Zealand, in reply to comments from the Acting Minister of Finance, the Hon. A. Hamilton. Mr. Levy states:— "The Acting Minister of Finance has issued a statement criticising my circular dated May 29 addressed to debenture holders. His statement nas two aspects, firstly he attempts to refute the suggestion that enormous loss, will occur through liquidation, and, secondly, he seeks to attack my estimate of publicly-held debentures. As regards that part of his statement which upholds the Public Trustee I unreservedly agree with him. When, however, he goes the length of stating, The suggestion (of enormous loss) made in the circular is entirely without foundation.' I must say that he credits debenture holders with insufficient business intelligence and foresight. My suggestion was that enor mous loss will ocpur through liquidation—a fact which is apparent to everyone. This is not a reflection on the Public Trustee, but is an indictment of the principle of liquidation itself. Surely, as debenture holders whose capital is at stake, we have a perfect right to our views and convictions, without incurring the unwarranted rejoinder of the Acting Minister of Finance." • . Mr. Levy criticises the sale of the furniture and equipment of' the Auckland office. Notice had been' given of the intention of,debenture holders to apply to the Court for the right to incorporate themselves as a company, and the office ■• equipment would have saved the proposed com- ' pany considerable establishment costs. "Dealing with the alleged underestimate of £100,000 in publicly-held debentures (Mr. Levy proceeds) I may point out that the New Zealand liquidator, with the New South Wales liquidator (as,joint managers and receivers) have been in full possession of all records and documents since October 5 last (over-eight months). Surely no figure" than that denoting public-held debentures could be more easily and- quickly ascertained, and until any amendment to my estimates is made available I rely' wholly upon those of our own advisers whose figures were in agreement with those of the Hew South Wales Commission's accountancy expert, Mr. HilL The facts are as follows:—(1) The combined paid-up debenture capital of the Australian and New Zealand Trusts was as at June 30, 1934, £522,000. (2) The paid-up Australian portion ifl £151.000. (3) The New Zealand portion.is, therefore, the difference, namely. £370,000. (4) From the last figure there has to be deducted an unascertained amount held internally under the sterling loan plan. (Since the Minister himself cannot state the accurate figure I likewise strongly urge debenture holders to preserve an open mind.) (5) The figure (£337,000) used in my circular was distinctly qualified as an estimate, and if I am shown to be in error by no more than 10 per cent, exclusive of Sterling Loan Plan holdings, then surely I shall be in good company with the many experts who have been engaged in this inquiry. (6) Our Committee, after exhaustive in?, vestigation has failed to locate a single debenture holder whose-name is not already included in the lift in our, possession. It' may be noted that our number of debenture holder* virtually agrees with the dumber furnished us, by the Public Trustee. <7>' Debenture holders representing over £150,000 of capital are satisfied that rescue and conservation of the assets is the only prudent business course. The Minister attempts to, refute the possibilities of enormous loss through the pro* cess of liquidation, but the debenture holders claim that there is no occasion for any loss whatsoever, but every prospect of a profitable investment if the assets are-.returned to those to whom they belong., 48) Judge Rogers, without offering offence to. the New South Wales Public Trustee, definitely stated, inter, alia, "I should personally be in favour of getting the assets out of the hands of the Public Trustee as soon as possible if-there is an efficient control." That control we •• as responsible owners and not as children are ready to provide. An acceptance of the Minister's suggestion of a 33 1-3 increase in debenture liability would' on my asset estimate show our debentures to be worth only 15s in direct contradiction to the inspector's report which placed them at 16s 9d in the £."