MEAT WORKS FINANCE.

New Zealand Herald, Volume LX, Issue 18530, 15 October 1923, Page 9

MEAT WORKS FINANCE.

CONTROL BOARD'S POLICY.

. EXPLANATION; BY CHAIRMAN. SALE • OF PREFERENCE SHARES. A statement was recently, made'by Mr. W. J. Poison, president of the Farmers' Union, criticising the attitude of the Meat Producers' Board toward the proposed sale of the Poverty Bay freezing works to Messrs. Vesteys,' and expressing the opinion that it had departed from the policy laid down in a resolution against overseas interests gaining control in the industry. A reply has been made by Mr. David Jones,, chairman of the board, in which he says that the board "has never had the slightest intention' of deviating from its policy as -laid down in the • resolution referred to, and that no Government pressure at this juncture, or at any other period, has been brought to bear upon the board." ' •; Reference was made by Mr. Poison to the attitude of the board toward another New Zealand farmers' freezing company which attempted to sell in Great Britain £20,000 to £25,000 worth of preference shares which gave no' control. He said that "the board unequivocally and in writing refused to allra the company to do this. Finally, under pressure, the board gave way." An explanation of this matter is given, by Mr. Jones, together with the correspondence that passed. He states that .the chairman and directors of a certain freezing company waited on the board on July 20 last, and asked whether the board would,vary its resolution dealing '■ with overseas interests as "it prevented ' them raising certain moneys, some £25,000. Mr. Jones asked: "Have.efyou had a definite offer of money?" and. the chairman said, "No," but he thought from a discussion he had that he could secure the .money, bub that the board's resolution had been mentioned as possibly affecting it, and he wanted the board to take "the sting out of its tail." ■ .. ■.-'■■'.'', ' .The . following /letter was sent to. the company on August 8: "The board has\ given careful consideration to the ■ request made by your company ! that it should modify its resolution restraining overseas interests from obtaining j further interests in the freezing works s of the Dominion, as it may, in your opinion, make 'it more difficult to secure . the finance "necessary to carry on your works. The board does not wish to place difficulties in the way, but rather to assist, if : it can be done without injury to the producers of the Dominion, , and with their interests are,bound up the interests of the farmers' freezing works. The resolution referred to should only deter those who may come within its scope and any permission given, or weakening of the board's attitude would be a direct encouragement to those interests, which, you agree, cannot, be permitted to further extend their field of operations. The. board therefore cannot see its way to modify . the policy . laid down in the resolution." " • ' • . '■'• ■•:_:* \ ■[). On .August 28, . the chairman -..of the company replied, acknowledging - receipt of this letter, "declining the request of the — company." Three, later the chairman of the Meat Board .wrote: "You have read into my letter, a great deal that. I did not state. The Meat Export Control Board is not preventing you from raising £20,000 to £25,000 in preference shares, which would have no vote, nor in any way control your company or dictate its. policy. The board .has no, desire to prevent you raising the preference shares that you suggest, and so long as these preference shares have nothing to do with the management of the works, and tho entire and • -unrestriclad control of the whole of your business remains in the hands of the New Zealand shareholders, the board would not take any action. It would only be if and when the. oversea capital that you. imported into your business began to take any part in the control or management of your ! works, or dictated -your policy in any way, that the board might, step in ana have any say in the matter. This is a position that the board cannot depart from. The board cannot overlook the fact that if oversea -interests-are permitted ,to . purchase and use without restriction further freezing works in New Zealand, or - acquire interests that would give them a further measure of control over freezing works in New Zealand, l 't t would, be a grave danger to the meat industry of this Dominion.. This is/the reason for the action the board has taken. . ( "';'. .;. I would again emphasise' what I said in my previous letter of the - Bth instant, namely/ that the resolution referred to should, only deter those - who may contemplate ; coming . within , its', scope." ' ' ;•; .'•.. '■" :'■". ■ ; . -;