Bill For Elimination Of 'Dry' Shareholders

Northern Advocate, 21 July 1949, Page 2

Bill For Elimination Of 'Dry' Shareholders

WELLINGTON, Thu. (Sp.).— Proposals to eliminate nonsuppliers from cooperative dairy companies and to give complete control to suppliers of milk and cream are contained in the Cooperative Dairy Companies Bill, which was introduced in the House of Representatives vesterday. There is provision for compulsory surrender of shares and for compensation to be decided by a tribunal whose decision is final.

The bill follows flu: recommendations made by a spuci.ii cunimiiUv set up last year to consider the relative positions of "wet" and "dry" shareholders. It also contains model articles of association which must be adopted by all cooperative dairy companies within two years. The bill delhies a supplying shareholder as one who lias supplied a

company continuously during a fin-

ancial year and who performed all his obligations as a shareholder.

There is a proviso to cover a shareholder who does not commence to supply because cows have not yet come into profit: it is then left to the directors to decide whether lie will commence and continue to supply the company as soon as his cows come into profit.

No person is a supplying shareholder unless lie or a predecessor in title of his shares has supplied to the company at some time during the - preceding eight months. RIGHT TO VOTE Only supplying shareholders will be entitled to vote at any meeting or on any postal ballot. Shareholders who have not supplied milk, cream or butterfat to the company in the preceding five years may surrender their shares.

The company is also permitted to accept a surrender of shares from any shareholder provided that the surrendered shares do not exceed onefil'th of the issued shares.

This may be waived by permission of tbe tribunal.

Breaches of this provision render any director liable to a maximum fine of £SO for each share unlawfully surrendered. Subject to this restriction, any cooperative dairy company registered under the bill may require the compulsory surrender of shares. Tiie company ran require the shareholder lo surrender all his shares or as many as the company thinks Til. The company is to pay out of its assets the paid-up amount of the shares, plus interest at the rale- of u per cent per annum calculated from the end of the preceding financial year.

The company may require the compulsory surrender of shares from any shareholder who has not supplied to the company in the past 12 months. It may also require the surrender of shares from a shareholder who has been allotted shares in a special group but who has not supplied to that group for 12 months. DEMAND SURRENDER A company also is empowered to demand surrender of shares from any sh -ehoirier who lias held shares for five years in excess of the number ho is required to hold under the articles or association of the company. This may nfl'c t all his shares, or only the number held above that which he is required to hold. No demand for the surrender of shares can be made without a resolution of sunolving shareholders. Surrendered shares may be re-issued.

If the shareholder and the company fail to agree on the consideration for surrendered shares, this is to be lixed by a Co-operative Dairy Companies’ Tribunal.

This will consist of three members, one appointed by the Minister of Stamp Duties on the nomination of the Dairy Board, another on the recommendation of the Minister of Agriculture, and the third to be appointed by the Minister of Stamp Duties. Decisions of the./ tribunal are final

Tiie bill provides that certain companies associated with dairy companies may also accept surrender of shares, but this docs not apply to companies where not less than 90 per cent of the allotted shares are owned by one or more cooperative dairy companies. There is provision for forfeiture of shares of uniracenblc shareholders. REPAYMENT PERIOD

The period of repayment for surrendered shares must not exceed 10 years. The value of secured shares is an unsecured debt.

There is provision for personal representatives, trustees, and others to take up or retain shares. Schedules to the bill contain model articles of association. Existing dairy companies are given two years within which to adopt tlic.se articles: failing this they wil cease to be cooperative dairy companies within Hie meaning of the legislation. The bill was read a first time.