BURNSIDE CEMENT COMPANY.

Evening Star, Issue 14625, 22 July 1911, Page 8

BURNSIDE CEMENT COMPANY.

TO 7HE EDITOR. Sir, —I am in receipt of a. notice from the liquidators of the Burnside Lime and Cement Company, covering a report upon the liquidation, and convening a meeting of .shareholders for next Tuesday. On that occasion, therefore, the curtain will be rung down upon a transaction which is probably unique in the mercantile history of Otago. But the drama will not close without placing on record at that meeting the opinion of that section of the shareholders euphemistically called in the report the dissentients, but who should have ben termed the righteously iurtignnnt shareholders, upon the whole transaction. I am speaking now on behalf of the holders of 3,467 shares in the Burnside Company, who have objected all along to the appropriation of their property and the frustration of their hopes. These persons represent the men who discovered the potentialities of the property, who fought against narrow circumstances and adverse influences, who patiently dug and bored and analysed, who financed perhaps even more than prudence would dictate, only to find, when their project was about to be crowned with success, that, without their knowledge or consent, their property had l>cen sold to ;i, powerful rival. Of course 1 do not forget that- the Court has sanctioned the e.alo, and I shall be careful to say nothing that might be construed into di.-respeet ; but this fact remains, and nothing can alter it: that under cover of the law the directors sold all their company's property for shares in another company, and put the other company in possession before even consulting their shareholders. Consider where this leads. This is probably the- only cases where such a. thing has been done in New Zealand. Now it forms a precedent, and henceforward no shareholder in a public company will bo aide to go to bed in the j assurance that- he will not rise in the monhiiQ to see an announcement that his directors have- sold the property for shares in a rival concern, and put that rival concern in possesion. The appointment of liquidators was a farce—there was nothing to liquidate. The directors had already liquidated the properly. Here the liquidators say: ''As under the terms of the sale tho Milburn Company were to pay all debts and liabilities due by the Burnside Company, and weie to take all the property and assets of the Bmnside Company, and receive all moneys due to the Burnside Company, the liquidators have not had to realise any assets or handle any cash, and consequently they have no accounts to present." That we have ground for indignation will he won from a few facts. The basis of the sale was that the Burnside shareholders were to receive Milburn shares in payment, calculated as follows:—The consenting shareholders were to receive 44 fully paid Milburn shares for every 100 Burnside shares, but the " dissentient" shareholders were to receive onlv 40 shares per 100. Tho Milburn shares' (20s fully paid) were- valued at lis 6d.and the Burnside shares (20s) at 355. That is to say, each consenting shareholder gave away shares worth £165 for other shares worth £sl 18s. Of course there is a- trilling compensation. The 14s 6d shares were bound to rise in value, and they have risen by fully 50 per cent. But" this increased value has been gained by the wreck of tho Burnside Company. The shareholders escaped from the wreck with their lives, but they are nor- consoled because they have saved some tri flint: belongings. The very fact, that the purchase has enhanced the value of Milburn shares is the sorest point with the •'dissentient" shareholders. The Milburn Company were in want of material, a* mav be recognised from tho fact that they 'were, paying at least 4s 6d per ton' for marl. Now t.hey have got the whole of the marl for the hewing, which costs onlv a few pence per ton. There are a million tons of marl in sight. That has been proved by boring. And probablv there are another million tons below. "Calculate this at only Is a ton. and vour readers will recogu-ise the value of the 'haul, and tho reason why Milburn shares are quoted at over £l. For these reasons the public will understand why we are angry and '•dissentient." Seine of'us may have said things which were impolitic," but that does not condone the transaction. But we eh all pro-t-e.4 to the last. Our ship is going down, tint it shall be with colors flyin::. YVo have nothing to reproach ourselves with ; ia:i others cay the t-amc'!—l am, etc., '■ JjissKXTiEN'T " SuAui:noi.i)Ki:. .luiv 20.