CANCELLATION OF SHARES

Evening Star, Issue 21581, 29 November 1933, Page 14

CANCELLATION OF SHARES

action against company [p EE United Press Association.] AUCKLAND, November 28. Eight shareholders in the Premier Tobacco Company (New Zealand) Ltd. took action in the Supreme Court today against the company and william Samuel . Russell, stated to be the promoter and a former director of the concern. The plaintiffs, who were represented by Mr Mackay, asked that their contracts to take shares in the company should be rescinded, that their names should bo removed from the register of the company, and that they should be refunded certain sums of money paid for the shares. The defendants were represented by Mr Wilson. Mr Justice Smith was on the bench. In accordance with an agreement between counsel, the proceedings against Russell, who was stated to be in England, were adjourned sine die to be brought on after seven days’ notice following his return to New Zealand. Mr Mackay said the actions arose out of applications by each of the plaintiffs for shares in the defendant company, which was represented to be a concern for the manufacture of tobacco and cigarettes, and was registered in March, 1931. The prospectus on which the shares were sold was a highly colourful document, and represented that the company was formed .with a strong financial group in'London known as the Eeronne Syndicate. The plaintiffs’ shares \yere all purchased as p result of this and .other representations in the prospectus. ' Since-the proceedings were instituted, continued counsel, the defendant company had gone into liquidation. The liquidators, however, had agreed that the plaintiffs were entitled to the cancellation of their shares and judgment against the company for the amounts claimed* They only asked that the amounts claimed should be proved. ... Evidence was given by George Parkes, secretary of the defendant company from its formation until its liquidation, that the company’s register showed the amounts paid by the plaintiffs to be as follows:—Edward Michael M'Ginley, £312 10s; John Martyn Wilson, £500; Professor Algernon Phillips Withill Thomas, £300; Mrs Sarah Elizabeth Morri.s, £75; Oliver Keith Lamb, £SO; Otto Richard Buchanan, £100; Alfred Henry Lindon Madderford, £lB7 10s; Charles Medley, £125. Witness said the shares in the company were now valueless, and were absolutely unsaleable. The company went into liquidation on November 20.

By consent of the liquidators as expressed by Mr Wilson, His Honour rescinded the contracts to take shares and directed that the plaintiffs’ names should be removed from the register of the company. He also entered judgment against the company in favour of each plaintiff for the respective amounts paid to the company upon the shares acquired. The question of costs was reserved.

It was made clear that the decision in the proceedings against the company would not prejudice the case of the defon'hmt, Russell, in any future litigation.