WOOLLEN MILL PROJECT

New Zealand Herald, Volume LXV, Issue 20115, 28 November 1928, Page 13

WOOLLEN MILL PROJECT

WINDING-UP PETITION.

ACTION BY SHAREHOLDERS.

DIRECTORS OPPOSE MOVE.

[BY TELEGRArH.—PRESS ASSOCIATION.] DUNEDIN, Tuesday. A case of considerable interest to the commercial community camo before Mr. Justice MacGrcgor in tho Supreme Court to day wlien a petition was filed by a number of shareholders asking for the winding up of the Southland Woollen Mills, Limited. Mr. 11. E. Barrowclough appeared for the petitioners and Mr. F. B. Adams and Mr. E. C. Smith for the company. The petitioners, who prayed for the winding up of tho company by the Court, claimed to have tho support of the holders of considerably more than half tho shares. Tho petition was opposed by tho directors acting on behalf of tho company. The petition alleged thai the company had not commenced business within a year of its incorporation and that thero was no reasonable prospect that, if allowed to go oil, tho company would succeed. It was also alleged that it was just and equitable within the meaning of the Companies Act that tho company should bo wound up on grounds that (a) A majority of tho shareholders aro convinced that it is not a sound commercial investment and are in favour of winding up; (b) that the directors have, allegedly, abused their privileges in entering hurriedly into a contract for tho purchaso of machinery after having been advised that a majority of the shareholders were against the proposal and wished them not to enter into any commitments till tho petition had ben disposed of; (c) that tho amount of capital subscribed is insufficient for the purposes of tho company; (d) that tho mill now proposed to be erected is a widely different proposition from that originally contemplated and that the shareholders had not been consulted regarding this essential change of policy. The defence was that the delay in incorporation was necessitated by the unfavourable circumstances of tho woollen mill industry.

His Honor said nobody seemed to know what the true position was. Mr. Barrowclough said a majority were for winding up and Mr. Adams claimed the majority were opposed to this course. Ho suggested counsel should get together and let hiin have the actual figures. Counsel agreed to this suggestion and the Court adjourned until to-morrow morning.