MARCUMS’ CAPITAL REDUCTION ALLOWED

Manawatu Times, Volume LII, Issue 6455, 12 November 1927, Page 10

MARCUMS’ CAPITAL REDUCTION ALLOWED

Court Proceedings to Upset Unsuccessful IDEA OF BIG PROFITS SCOUTED [By Electric Cable-Copyright.] [Aust. and N.Z. Cablo Association.] (Received Friday, 5.5 p.m.) LONDON, Nov. 10. Mr. Justice Eve; in the Chancery Court, granted reductions of the capital of the Marconi and subsidiary companies The chief opposing shareholder,’ cross-examining Mr. Kcllaway, suggested that with proper management the company could make a profit of £400,f00 a year. Mr. Kellaway: “It is most unfortunate that such a question should bo put owing to the effect on tho Stock Exchange, but, as I am obliged to answer. I must say that my opinion is that there is no chance of earning such profits for a considerable number of years.” The Judge said that when the company- had lost six million of money it was evident that there had been expenditure which it would be difficult to justify, but the resolution of the shareholders had not been successfully impeached.

After turbulent meetings of shareholders hi the Marooni Company a scheme of reconstruction was carried in March. This involved a reduction in the capital from £4.000,000, to £2,375,000. An examination of the position of the company had been made by an eminent account Sir Gilbert Gnrnsley. and it was on his report that the directors, of whom Signor Marconi was then chairman, recommended the scheme to Iho shareholders. Sir Gilbert reported, inter alia, that the deficiency was £1,625. 000, and a reduction of capital was necessary. There were wild scones at the meeting at which the scheme was carried. The dissentient shareholders strongly opposed the scheme, and one of them accused Signor Marconi of having speculated with the company’s shares. To that he holly retorted: “That is an impudent lie.”