THE OLD SHARES OF THE BANK OF NEW ZEALAND.

New Zealand Herald, Volume XXVI, Issue 9323, 28 March 1889, Page 5

THE OLD SHARES OF THE BANK OF NEW ZEALAND.

[from oua own correspondent. J

London, February S. Messes. Paine, Son, and Pollock, solicitors to the Bank of New Zealand, have been in correspondence with the Share and Loan Department of the Stock Exchange in regard to the nominal amount of, and existing liability upon, the old shares of the Bank. In the course of a letter which has been published in the Weekly Official Intelligence, Messrs. Paine, Son, and Pollock state as follows —

We have never had the slightest doubt, and have been advised most positively by Mr. Phipson Beale, Q.C., who was consulted by us last autumn in this matter on behalf of the Bank, that the effect of the resolutions passed by the Bank shareholders in New Zealand in October last was to reduce for all purposes the then subscribed capital of £1,000, in 100,000 shares of £10 each to £700,000 in 100,000 shares of £7 each, and that consequently these shares are now fully paid and free from liability, other than the " reserve" liability of £10 per share imposed by the Act of the New Zealand Legislature, which confirmed the deed of settlement. As to the necessary formalities accompanying the reduction of the capital, we were advised both by Mr. Phipson Beale, Q.C., and Mr. Cozens Hardy, Q.C., that it was competent to the members under the provisions of the deed of settlement to effect such reduction by special resolution, but that it would certainly be advisable to save all question hereafter, to obtain a further statutory authority from the New Zealand Parliament confirming the reduction of the capital. This sanction will, we understand, in due course be applied for in New Zealand ; but we think there is a misapprehension in supposing that any authority is required from tlie Mow Zealand Courts, the Bank not being constituted under the New Zealand Companies Act, but under a deed of settlement and special Act of Parliament. As regards the paragraph to which you called our attention in the prospectus of the new share issue, and which refers to the option reserved to the old shareholders to again convert their shares into £10 shares by the payment of £3 per share, we are perfectly clear that this could only be done by statutory authority, and the only object in referring to the matter in the prospectus was to obviate the charge of breach of faith hereafter in case the £7 shares should again be converted into £10 shares, and rank for dividend on the larger amount.