WEALTH GOES BEGGING.

New Zealand Herald, Volume LXIII, Issue 19502, 4 December 1926, Page 2 (Supplement)

WEALTH GOES BEGGING.

DIVIDENDS IN COMPANIES. OWNERS WHO DISAPPEAR ACCUMULATION OF MONEY A CLAIM AFTER 163 YEARS. When a certain company in Britain was wound tip not long ago no rVwer than twenty-seven of its shareholder!' were returned as "missing," This struek the chairman as remarkable— as. indeed' it was. But "lost" shareholders in Britain number thousands, and to their credit is standing money to the extent of millions of pounds. Ihe general procedure in regard to such money is curious. If a dividend warrant is returned through the Dead Letter Office endorsed "Unknown" or Deceased, and the amount represented is not demanded, a similar warrant is nevertheless sent half-yearly to the last registered address of the vanished shareholder. This may go on for a long period. Warrants were posted to c/ lost shareholder for more than foryears,, and ultimately ho was entitled u , dividends amounting to £753. But money which thus accumulates cannot necessarily be claimed by the shareholder. Some companies deprive, or attempt to deprive, shareholders of dividends which are not demanded within a certain period. One company provided by its articles that dividends unclaimed for threo years might, by a resolution of the directors, be forfeited for the benefit of the com' pany. Among its proprietors were two brothers who jointly held a number of shares. Notices and dividends were sent to the one whose name appeared first on the register. He removed to Sydney, whena he sied. His death was not formally notified ISO the company, and consequently, though it was known to the officials, the practice of sending dividend warrants to his last address at Sydney w<ii> continued. Nine years later the other brother died and his executrix claimed the .dividends; which had accumulated. The company \ refused to ps.y them. When, however, the executrix brought an action to recover them she secured a verdict, mainly on the ground that if officers of a company have actual Knowledge that one of two joint shareholders is dead, the company cannot base a resolution forfeiting unclaimed dividends upon a formal notice addressed to the deceased shareholder. ' An Elaborate Fraud. Other companies confiscate unclaimed dividends under common law. A singular instance occurred' a few years ago. A certain shareholder received his t\regularly during his lifetime, but sboitly after his death his executor ceased to draw them, and they accumulated for, nineteen years,, when they amounted to £349. After they had remained untouched for a further twenty-one years, they were claimed by the presentative. But his claim was then barred by the Statute of Limitations. Occasionally unclaimed dividend!} neither revert to a company nor ultimately go to liho shareholder entitled to them. They are pocketed by official who "know things." A few years ago, for instance, the secretary of a certain company noticed that the endorsement on a cheoue drawn by him did not agreo with the name of the payee, "Herheit" having been written instead of "Heckler." He ca,used inquiries to be made, and an elaborate fraud was discovered. A dishonest accountant sent in ckiras for amounts standing in the names of persons who had died, and his accomplice, a servant of the company, whose duty included the preparation' of dividend warrants, then initialled them, whereupon the secretary drew cheques for the amounts and sent them to the addresses given—invarisibly accommodation addresses. In some cases double payments . were made in this way. Altogether the conspirators obtained a large sura. When a company is wound up any dividends unclaimed after six months are paid to the Companies Liquidation Account in the Bank of England. Liquidators are bound to furnish accounts to the Board of Trade. Dividends are most frequently unclaimed when they ar© declared, by a company aftw it has been non-producfcivQ for years. 5 £IOO Mounts up to £8(100. Certain old companies in the City of London, originally "hard ventures," have spme dividends which have been accumulating for, more than a eeniuiy. A descendant of an original stockholder in one of these companies recovered trom it £i,oo, the norainal value of the holding, plus accumulated dividends for 163 yeius, the whole amounting to £3600. Not many years ago one of the old city companies had £145,413 waiting to be claimed. in connection with many features of London now commonly regarded as public undertakings from the beginning, though, in fact, they were constructed by companies—such a,s Waterloo Bridge, i'ho fhamei Tunnel, and Highgate Archway—thera are stories illustrative of the folly of abandoning hope in "hard venture#." A story is tolcl of a solicitor who, whenever he went under Highgate Arcihway—and for some years that was twice a day—invariably raised his hat to it. The company which built it returned nothing to the shareholders for a long period, but ultimately there was a laige sum available for distribution. Many of the shareholders could-not bo found notwithstanding that in some-'cases they were entitled to plums of £SOO or £6OO. The. solicitor got a list of them arid steadily worked through it, with the result that he *ound nearly all of the shareholders or their*representatives and made a handsome sum of money for himself. A "Slaughtered Innocent." Chance, it will be seen, is far too groat a factor in relation to dividends. It would doubtless be impossible to preventsome of them remaining unclaimed for a tmie, but if tho Legislature passed an Act on tho lines of the Unclaimed Demerits Bill, which was introduced in the House of Commons more than a quarter of a century ago, owners would ultimately be found for nearly all such money. The object of this measure war. to compel companies and banks to'keep a resister c-f unclaimed stocks, shares.; deposits e?c., this register to be accessible to the public cm payment of a str»a'l A warm recent'on was given to the bill, and it passed the second reading- Unfortunately. however, it shared the fate of most private members' bills • it was massacred at the end of the session.