P.B. MEAT WORKS.

Hawera Star, Volume XLV, 28 August 1925, Page 5

P.B. MEAT WORKS.

THE COMMISSION’S REPORT. SALE JUSTIFIED. (BY TELEGRAPH, PRESS ASSOCIATION.) WELLINGTON, Aug. 27. The Lysnar Meat Commission’s report was presented to. the House this afternoon. It is a voluminous document,cemprising 153 type-written sheets and containing roughly seventy thousand words. The effect of the report is completely to absolve the Minister for A griculture, Meat Board officials and the National. Bank (froml blame in connection with the sale of the properties of the Poverty Bay Farmers’ Meat Company, Ltd., to Vesteys, the Commission considering that in the circumstances the sale was fully justified. The commission calls attention to the conflict of evidence during the inquiry, and opines that the testimony of independent witnesses was more correct in the circumstances, while Mr, W. D. Lysnar’s recollections of matters in question were attunes defective. The report reviews the circumstances attending the erection of the works, the legislation coverin'- the meat industry, and the political and financial situation of the country in 1923, and also the conflict of evidence regarding the valuation of the works The Commission reache s the conclusion that the financial, position in September, ’ 1923, was neither easy nor .lopeful. 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 prices for dipping tonnage against the advice of the National Bank, and the working of the steamer had not been profitable. Mr Clarkson was at a disadvantage in investigating tlie company’s financial position, owing to the absence of a orivate journal. The evidence showed that in 1923 there were anti still are too many freezing works in New Zealand. Two such works were ample for the Poverty Bay district, and under these circumstances the works were not worth more than the figure at which they stood in the company’s book s for 1923. Attention is called to what is termed the casual manner of conducting certain financial transactions, leading to an inference in one case that a cheque for £SOO received from a We’lington company might have been used in the 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 the whole of its assets, but it was destitute of i’.ouid assets and entirely at the mercy of its chief creditor, .apart from the fact that it owed the National Bank a very large sum. In addition to the unfortunate shipping ventute, other main causes of the company’s downfall were ■ts 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 the Commission’s opinion, Mr Lyshar. in 1923, did negotiate with Arm our s it the hope of raising a loan of £340,000 and also that negotiations took place with Vesteys, and that if _ the price offered by Vesteys had been high enough Mr Lysnar would have been prepared to advise its acceptance. The Commission states that evidently the reason Mr Lysnar desired it, though lie did not - want to negotiate with Vesteys? w r as that this was not consistent with his protestations that his actions and charges against the Minister. W’ere wholly in the public interest. The commission considers that in 1923 the company could not reasonably have expected to re-establish itself, and the bank could not reasonably be expected to let the company I* indebtedness to it increase further as there was no reasonable margin of security. Regarding the allegations against Mr Jones (chairman of “the Meat Board), the Commission considers they are - unfounded. The Commission asks two questions: First y, did the Minister act in any way contrary to his duty? Secondly, did the Minister act in any manner c-mtrarv to the public interest? It points out that the Minister and his Officials investigated Vestey’ R application for a transfer of license, and the Commission considers they are no more within the prohibited class than, for instance, Bortliwicks. T The report point* out that Mr Lysnar, as one of the directors, discussed the question of Vesteys purchasing the V aipac.a works, and adds: “Mr Lvs-. par, we think, was on- the horn* of a dilemma We consider the Minister did the only thing he could fairty and suitably have done, seeing that Ves•ovs held licenses in the district. In our opinion, if the bank had introduced some- person or firm about whom the Minister could not honestly have come to the conclusion that they were suitable transferees, the Minister should have refused. In our, opinion he made reasonable inquiries, took reasonable ieps, gave the matter due and reasonable consideration, and came to a fair and reasonable decision, and in consentng to a transfer of this license did not in any. mariner act. contrary to his duty.” . ~ , r T ’ The Commission finds that. Mr Lysnar’s attacks on the character and meurity of various people, including attacks on the conduct of the Minister in consenting to transfer, were not justi'icd. but some -allowance must be made ■ : or Mr Lvsnar’s. feelings owing to the heavy losses lie and his friend*, had suffered. The Commission finds that the actions of the chairman of the Meat Board and the ban in connection with the sale of the works was above question. ' ’ , The report comments severely upon the fact that a. certain private journal was not available in view of the importance which was believed -to attach to it in e’earing up certain matters connected with the finances of the company, and expresses dissatisfaction with the'manner iff which Mr Lysnar’s secretary (Mr Hamilton) gave his evidence. 1