CLAIM FOR £190,000.

Manawatu Times, Volume XLII, Issue 1764, 16 March 1921, Page 5

CLAIM FOR £190,000.

MR MYERS IN DEFENCE. (Per Press Association.) AUCKLAND, Last Night. Continuing his opening speech in the Dominion Cement Company case, Mr Skerrett said that no sooner had the works been completed than the debenture holders stepped in and purchased the property and the whole of the capital. The capital was lost in 1914. When the directors ascertained the position of affairs they should have called the shareholders together. Plaintiff asked the court to hold that the preferential capital should be returned. .He contended that the company and the directors ought not to have allotted the £19,011 preferential shares applied for by the shareholders, because the scheme for increasing the capital was a palpable failure; and secondly, that at the time the company was hopelessly insolvent. Some 1250 additional shares were also shares that ought not to have be-'o allotted because the represenlafTons in prospectus were then untrue as the assets had been pledged to the debenture holdrs to the extent of £IIO,OOO. Mr Myers, by arrangement with other defending counsel, addressed the court first on behalf of his client, Mr Heathcote B. Williams. One significant fact, he said, that had probably come under His Honour’s notice, was that the plaintiffs did not include amongst their, number a single commercial man. Although there were many commercial men and business men on the share list, which contained hundreds of names, it had been left to two sheep farmers, medical practitioners, a solicitor and a baronet who he believed was also a sheep farmer, to commence these proceedings. Why was there not a commercial jnan among them? The reason was not far to seek. Any commercial man of standing and of any experience knew and appreciated the difficulty with which these unfortunate directors had to contend during the greater part of the company’s history. He referred to the period beginning with the outbreak of Any commercial man with experience of the last few years would know that the directors v)ere not to blame for what had happened, and that they were the unfortunate victims, of circumstances. That was shown by the report on the position made by a committee of the shareholders and business men appointed in March, 1917. It was well known that many companies had failed to achieve success, and had lost all their capital without any blame being attachable to the directors. The plaintiffs could not succeed unless and until they were able to show that the loss of which they complained was due to the acts of misfeasance, which they had alleged. The case was adjourned.