AN INTERESTING BILL.

Gisborne Times, Volume LIX, Issue 9574, 27 July 1923, Page 6

AN INTERESTING BILL.

RELIEF TO GUARANTORS TO A BANK. WELLINGTON, July 24. Tho Hon. Mr. Nosworthy moved tho second reading of the Companies Special Empowering Bill, which, he explained, was intended to give relief to certain directors, who had guaranteed the account of the New Zealand Meat Packing and Buy on Coy. (Co-op) Ltd., on behalf of certain other companies, the shareholders ot which were empowered to say by resolution whether a refund should lie made out of the funds of their funds to the directors who had been called upon to pay up by the bank. Mr. Wiltord protested against the Bill, because it gave no protection to the preference shareholders of the companies which wouid be affected by its provisions. Mr. Hainan declared that this was special legislation which the House should not be askccl to pass. There was the ordinary Company Law, which should he sufficient for the purpose. He suggested that the Bill should be referred to the Statutes Revision Committee which could take evidence.

Mr. Hav.ken said the position was that certain directors uf the small dairy companies had guaranteed the account ol' the New Zealand Meat Packing and Bacon Cov., .Ltd., on behalf of iheir companies and, when the guarantee was called up, it was considered fair that the dairy companies should recompense their directors for the money they had paid out to the hank, but it was found that the companies had no power to do so and the Bill was intended to give the shareholders that power. Mr. Hocklev stronglv supported the Bill. Messrs. Poland and Holland urged that if should be sent to a committee, as there were, undoubtedly, objections to the proposals of the Bill and the full facts...should be brought out. Sir J. Luke said the Bill introduced a. most dangerous precedent and it ought to go to a committee. Messrs. Sicley, Kolleston (Tiinani) i’orhos and Hansom all contended, that the Bid gave the directors preference over all the other creditors, which was unfair. Tho Minister, in reply, said the Bill was perfectly fair and straight forward. The Bill was read a second time and referred to the 'statutes Revision Committee.—P.A.