N.Z. INVESTORS

Grey River Argus, 20 October 1943, Page 5

N.Z. INVESTORS

COMPANY CONTROL DANGERS. COMMENT BY JUDGE. DUNEDIN, Oct. 19. “We are well aware of the possibilities of manipulation by dishonest or unscrupulous persons in control m a number of interlocking or subsidiary companies/'” said Mr. Justice Kennedy, in his charge to the Grand Jury in the Supreme Court to-day. They had had some experience in this country of difficulties due to abuse of power of control of subsidiary companies, and the legislature itself nad intervened by passing the Companies (Special Liquidations) Act, in 1934, which provided for the winding up oi some 13 companies. His Honour added that, at the present time in England,, a strong Committee, presided over by) Mr. justice Cohen, of the Chancery Division, was considering what amendments were desirable, and reviewing the requirements of law and safeguards afforded to investors and the public interest. There were, as they knew, always a number oi inexperienced investors, who jiTUgui. be hustled by strong salesmanship and personal pressure from one company investment to another, and manipulated like mere pawns. A favourite techpique was to get them to realise on sound investments and to change over 1 to shares “pushed” by a salesman) and even to turn their interest, or dividends into further shares.

“It may well be that some further, provision is required for the protection of inexperienced people,” said His i Honour, “and, no doubt, such cases as I have mentioned will receive special consideration in England, and if some remedy, which does not unduly hamper xegitimate activity, can be discovered, it will • be adopted there and copied here.”