COMPANY'S AFFAIRS.

New Zealand Herald, Volume LXVII, Issue 20536, 10 April 1930, Page 13

COMPANY'S AFFAIRS.

WINDING-UP PETITION.

CEMENT-MAKING CONCERN.

RESULTS FROM EXPENDITURE

DIFFICULTY OVER CAPITAL.

|BT TELEGRAPH. —OWN CORRESPONDENT.] WELLINGTON', Wednesday.

A petition for the compulsory winding, up of the National Portland Cement Company. limited, came beforo the Chief Justice! Sir Michael Myers, in the Supreme Court today: Mr. C!. G. Watson and Mr. G. E. Arris appeared for tho petitioner, James Costello, of "West port, and Mr. W. 11. Cunningham appeared for the company.

Tho petitioner held 200 contributory shares, said Mr. Watson, and he also claimed to represent 4185 other contributory shares. Tho company was incorported in 1924 with a nominal capital of £300,000, which was subsequently increased to £350,000. Actually 27,950 contributory shares had been issued, and tltero wero' also 25,000 fully-paid shares issued. It would bo seen from tho figures before the Court that in the five and a-half years which had elapsed sinco tho company was incorporated, less than onetwelfth of the contributory shares had been issued, and the total amount received from shareholders on account of calls to date was £9183.

His Honor observed that three points which struck him were: (1) The delay in ccmmencing operations; (2) every sixpence received from the shareholders had btien spent, and there was nothing to show fcr the expenditure; (3) the company was a cement-making company, and wanted to make something else.

Expenses of Flotation.

Counsel said it appeared that to get in £9OOO, there had been spent roughly £i)uoo. Tho company had gone to the eipense of printing and circulating no fewer than three prospectuses. Even if credit were given to the company for heavy preliminary expenses, it seemed that tho expenditure had been somewhat staggering, in view of the comparatively small return.

Counsel said that the objects stated in the first prospectuses were: (1) To manufacture and deal in cement, and (2) to carry on a large number of mining and quarrying operations. Tho primary object was, hd submitted, to manufacture arid deal in cement. There was no mention of hydrated lime. The proposition to which tho public were invited to subscribe was for the purpose of a cement company only. In the other two prospectuses, very brief reference only was made to hydrated lime, and the manufacture of cement was freely mentioned. His Honor remarked that he thought it would have been a commonsense thing to have eliminated the disgruntled shareholders and go into voluntary liquidation and reconstruct the company. No Suggestion of Misconduct.

Mr. Cunningham said that there was no suggestion of misconduct in the operations of the company. Tho result was much to be regretted, but had the capital come to hand the expenditure in relation to the capital would have been shown on a much better footing. Unfortunately, it cost as much to try to sell the shares as actually to sell them. Of the money spent to date, £3048 represented money spent in acquiring property. Mr. Watson: It has put some money into circulation, at any rate.

Owing to the financial depression, the company had not been able to get capital to start operations, continued Mr. Cunningham. Plis Honor: Are you justified in saying that ? For quite a long time there was any quantity of money available for invest'ment.; I am not speaking of the last eight or ten months, but prior to that money was lying idle. Counsel said that during the past five years tha company had been functioning regularly and annual meetings had been held.

His Honor: And the payment of salaries ? It is functioning merely as an artificial entity. That is not carrying on business.

Counsel replied that the shareholders were kept informed of the company's progress, or rather lack of progress. His Honor: They have had six years to raiso their capital. Is that not long enough; six years, during the greater part of which, as I have said, money was abundant ? v Primary Objects Retained.

Counsel said there was no suggestion in the third prospectus that the primary object had been abandoned and that the idea was to go ahead with the hydrated lime scheme.' The company had never lost hope of starting in the cement business.

His Honor:* We never abandon a hope. All I can say is that they are very optimistic if they think they can obtain money within a reasonable time to carry on the cement business.

■Mr. Cunningham then dealt with the question whether it could be said that the substratum of the company's undertaking had gone as a- result of the proposal to go in for hydrated lime. Ho pointed out that the acquisition of suitable property, as stated in tho primary object, had been carded- out. Tho attitude of tho directors, said counsel, was that after receiving notice of the petition, they had suspended operations and' had agreed to put tho position frankly before tho Court. His Honor said that it was admitted very properly by Mr. Watson that the directors had acted in a fair and frank manner. Decision was reserved.