Reconstruction of Trusts

Manawatu Times, Volume 59, Issue 272, 20 November 1934, Page 7

Reconstruction of Trusts

New Scheme Placed Before Commission UNFAVOURABLY YTEVHED BY CROWN United Press Association.—By Electric Telegraph.—Copyright. Received Monday, 9 p.m. SYDNEY, Nov. 19. Presenting a netv scheme for the reconstruction of the Trust companies Dr. Louat, for tho British National Trust, Ltd., and the British National Investment Trust, Ltd., told ' the Commissioner than it was proposed to eliminate all the smaller companies and reallocate their assets to tho main companies. Certain companies must be retained, said Dr. Louat, and the British National Trust was one of them. It occupied a position of importance in relation to the two main companies, the Southern British National Trust and the Investment Executive Trust. Three courses could be adopted. Firstly, all the companies could be wound up. Secondly, debenture capital could be converted into share capital. Thirdly, methods of control could be changed. It was the third course that he advocated. If this course were adopted the gross rents of. the trust building could be managed by a board of independent directors aud it couid be built up into a going concern. Amplifying his schemes, Dr. Louat said the trust organisation would consist of the Investment Executive Trust, the Southern British National Trust and the British National Trust. It was proposed that the articles of the Investment, Executive Trust and the Southern British Trust should bo altered to provide for boards of seven directors, of whom two would be elected by the shareholders and live by the debenture-holders. Tho inclusion of the two shareholders’ directors was entirely calculated to serve the interests of the debenture-holders, in that it enabled them to retain the assistance of McArthur and Alcorn in a deliberative capacity. He pointed out that the provision for five directors forming a quorum would ensure a majority of the debenture-holders’directors at all meetings. In regard to the British National Trust it was submitted that there should be a board of six directors, two of whom would be appointed by the shareholders and two each by the de-benture-holders of the bouthern Biitish Trust and the Investment Executive Trust. Four directors would constitute a quorum.

The last section of ..the plan was suggested with a view to strengthening the financial structure. A new mortgage should be raised to replace the existing mortgage on the trust building at a substantially lower Tate of interest.