A VENTURE THAT FAILED

New Zealand Herald, Volume LXI, Issue 18827, 30 September 1924, Page 9

A VENTURE THAT FAILED

DRURY TERRA COTTA.

DISSATISFIED -CREDITORS;

FURTHER INVESTIGATION.

;., A meeting of shareholders and; creditors of : the Drury Terra CottaCompany was held at the official assignee's office yesterday. ''•'.''

The circumstances in which an order for the winding up . of the company was issued by tho Supreme Court on September , 6 were reviewed by Mr. W. S. Fisher, who slated : that he had. received a list' of creditors and shareholders. No bank passbook had been received, and there was nothing in the cash book to show what moneys had been received, and what bad been paid away. A prospectus showed the capital of the company to bo £50,000; 15,000 shares had been allotted, but there was no record as to the amount paid in connection with the share allotment. ;

Mr. Holmden, counsel for the secretary, and for one of tho shareholders, stated that tho company was formed by Julius Albrecht, ' who held certain patent rights and an option over a property. Application and allotment moneys amounting ■to £1259 7s 6d were received by ; the stockbroker acting for the company, jwiio had a contra account of £478 15s for brokerage and underwriting fees.' The stockbroker subsequently left New Zealand, owing the company about £800, ; having underwritten the capital to tho extent of 4250 shares. ■■: ,

Mr. Fisher: Well, the bulk of the £1259 was his own monjey—about £1150, I think.

The purposes for which the company was formed were explained by Mr. it. P. Hunt, who stated he had incorporated the company and drawn up the prospectus, but had not had anything to do with the company since. Its object was the working of certain clays into terra cotta; patent rights were acquired from Albrecht ? also his . option over certain clay deposits at Drury, which were to bo used for the manufacture of interlocking bricks and other articles. The land conveyed to the' company was subject to a mortgage about £516 had been paid on the property. So far as tho speaker knew, there were no other asset*, and no machinery. : Creditors' Complaint. Mr. Armstead, counsel for the two creditors to whom the property originally belonged, _ said the case called for fullest investigation.' The company was incorporated in 1922 with a list of provisional directors, who made ; themselves more ,or less responsible for the statements in their prospectus. They allowed matters to drift on, doing absolutely'nothing for two years, and even though they knew some three or four months ago that steps were being taken to have the company wound up, they took no action. The company had a nominal capital of £50,000; it was entitled •to go to allotment at £15,000. Of the 15,000 shares, 5500 were paid-up shares to Albrecht, so that it was clear they had had only £10,000 to work on. Then the broker underwrote the company to the extent of 4000 shares, and according to statements made, left; the country owing the company £800. I | "He never should have been allowei" j to leave, owing that sum," declared Mr. Armstead. "No books '■■ have : been kept, no bank-book produced, and there is no record of \ various transactions. It seems as though the people who put their mcfcey into the company have not had any run for their money, at all. My clients would have asked for. the cancellation of the contract and damages, but the company made an urgent request for the land. We have been fooled about for two, years; ..he company had no chance whatever from the start." - '■>.■ , ■':■.': . .

Mr. Holmden agreed that the company would have been well advised to have obtained legal opinion as to the position. He repudiated any suggestion that the broker in question had cleared out." Mr. , .Amislead: Well, he went with £800, which we could now do with very well, and also with 4000 (shares. Some discussion ensued" as to the circumstances in which Albrecht had transferred his option to the company. The minutes of the statutory meeting" held in February, 1925, were, examined by Mr. Fisher, who stated that an agreement had been adopted, subject to certain alterations, but the minutes had not been signed by the chairman, and there was nothing to show whether the alterations were put into effect. :'-}..■. Action Suggested. Mr. Armstead said he. was strongly of opinion that some form of 'action should be taken : against the directors; who would then be called upon to explain the exact position. V' If > any private person had done what this company has done," he declared, they would have been brought before the Court., without any doubt." Mr. Holmden: What for Mr. Armstead: For taking shareholders'! money.' '.';.'. :; ';'V.' "'■'■ ■-'' Mr. Holmden: You cannot say the money has been taken. ' Mr. Armstead: Well, it has gone, any-, way, and we don't know whore. If these people collect nearly £2000 and there is nothing to show for it, we aro clearly entitled to know where they collected it, and how it has been expended, If this information is not forthcoming, steps must be taken to secure it. It has been stated that the company had no bank-book. It has collected money, however, and there was. a : secretary, and if there was no banking account, thero is something very strange about the whole matter. -,■■■■;:•: Mr. M. I). Gray, accountant, confirmed the statement that there was no bankbook. The directors had decided not to open a banking account, and the moneys collected were in the hands of the broker and the lawyer, who gave.the usual credit forms as receipt. He had made one or two inquiries with regard to' the affairs of the company, and had been told that the " position 'was difficult." : " Mr. Fisher: Did you go into the accounts ? •

. Mr. Gray : There was nothing to go into. The only accounts were those of the broker and the lawyer. . ; " ■:■'••;*"' Mr. Hunt submitted figures showing that the total . sum received by. him, was £472 10s. Apart from his fees, the company owed him about £125. Counsel for Mr. Albrecht said it was imperative that a statement should be procured as to the disbursements of the money. Apparently i nobody had been paid, neither lawyer, accountant', nor anyone else. ''■■■:'■'■'■ .>:'•'. ■':<

" l think there is evidently a goon deal of information yet to come," observed the representative for one of the creditors, " and I move, that. the. meeting be adjourned so that . further investigation may be made." - t The motion was earned, the meeting being adjourned until Tuesday, October 7.