MEAT WORKS SALE

Greymouth Evening Star, 28 August 1925, Page 8

MEAT WORKS SALE

ENQUIRY BOARD’S REPORT.

(Per Press Association.)

WELLINGTON, August 27.

The Lysnar Meat Commission’s report was presented in the House this afternoon. It is a voluminous document, comprising 153 typewritten sheets, and containing roughly /0,000 words. The effect of the report is completely to absolve the Minister of Agriculture, the Meat Board officials, and the National Bank from blame in connection with the sale of the properties of thd Poverty Bay Farmers Meat Company, Ltd., to Vestey’s. The Commission considers that, in the circumstances, the sale was fully justified. The Commision cals attention to a conflict of evidence during the inquiry, and opines that the testimony of the independent witnesses was more correct in the circumstances, while Mr Lysnar’s recollections of the matters in question were at times defective. The report reviews the circumstances attending the erection ,of the works, the legislation covering the meat industry, and tlio politiccil und financicil situation of the country in 1923. It also alludes to the conflict of evidence regarding the valuation of the works. The Commisison reaches the conclusionthat the financial position in September, 1923, was neither easy nor helpful. The Company’s financial position at the time of the sale is reviewed. The purchase of the steamer Admiral Codrington is stated to have been made unfortunately at the peak of the prices for shipping tonnage, against the advice of the National Bank. The woik-' ing of the steamer had not been profit-

able. Mr Clarkson was at a disadvantage iii investigating the Company s financial position, owing to the absence of the private journal. The evidence sowed that in 1923 there were and still are, too many freezing works in New Zealand. Two such works would be ample for the Poverty Bay district. Under these circumstances, the price was no more than the figure at which they stood in the Company’s books for 1923. Attention is drawn to what it terms the casual manner of conducting certain financial transactions, leading to the inference, in one . case, that a cheque for £5OO received from a Wellington company might have been used in permanent reduction of the Company’s overdraft. In 1923 the Company’s position was hopeless, and when the sale was made, the Company,not only owed considerably more than the fair value of its whole assets, out it was destitute of liquid assets, and entirely at the mercy of its chief creditor. Apart from the fact that it owed the National Bank a very lareg sum, in addition to the unfortunate shipping venture, other main causes of the Company’s downfall were a failure to make reasonable provision for depreciation, and the payment of dividends, which should have been conserved in the business. In short, at the time of the sale, the Company was insolvent. In tho Commission’s opinion Mr Lysnar, in 1923, did negotiate with Armours in the hopd of raising a loan of £340,000, and also that negotiations took place with Vestey’s, and that if the price offered by Vestey’s had been high enough Mr Lysnar would have been prepared to advise the acceptance. The Commission states that evidently the reason Mr Lysnar denied it, though he did not want to negotiate with Vestey’s, was that this was not consistent with his protest that his actions and charges against the Minister were wholly in the public interest. The Commission says that in 1923 the Company could not reasonably have expected to reestablish itself, and the bank could not reasonably be expected to. let the Company’s indebtedness to it increase •further, as there was no reasonable margin of security. Regarding the allegations against Mr Jones, the Commission considers they were unfounded.

The Commission was asked two questions Firstly, did the Minister act in any way contrary to his duty ? Secondly, did the Minister act in any manner contrary to the public interest? It points out and his officials investigated Vestey’s application for a transfer of the license, and the Commission coneiders this was no more within the prohibited class than, for instance, Borthwicks.

The report points out that Mr Lyshar., as one of the directors, discussed t-lac. question of Vestey’s purchasing the Waipara Works, and it adds: “Mr Lysnar, we think, was on the horns of a dilemma. We consider the Minister did the only thing he could fairly and equitably have done, seeing that Vestey’s had licenses in the district. In oirr opinion, if the: Bank had introduced some person or firm about whom the Minister could not honestly have come to l the conclusion that they were suitable transferees, the Minister should have refused. In our opinion, he made reasonable enquiries, and took reasonable steps, and gave the matter due and reasonable consideration, and came to a fair, reasonable, decision; and, in consenting to the transfer of this license, did not act in any manner contrary to his duty.” The Commission finds Mr Lysnar’s attacks on the character and integrity of various people, including attacks, on the conduct of the Minister in consenting to the transfer, were not justified, but some allowance must be made for Mr Lysnar’s feelings owing to the heavy losses he and his friends had suffered. The Commission finds the actions of the Chairman of the Meat Board and the Bank in connection with the sale of the works were above question.

The report comments severely upon the fact that a certain private journal was unavailable, in view of the importance which was believed to attach to it, in clearing up certain matters collected with the finances of the Company, and it expresses dissatisfaction with the manner in which Mr Lysnar’s secretary, Mr Hamilton, gave his evidence.