AS THEY WERE

New Zealand Times, Volume LII, Issue 12199, 25 July 1925, Page 7

AS THEY WERE

SECOND MEETING OF COMBINED BUYERS FRUITLESS PREFERENCE SHARES DOMINANT TRUTH OF CIRCULAR TO SHAREHOLDERS HOTLY DENIED They sat all day, they talked all the time, and when the ■un set they were in the seme position as when the day dawned. This is an epitome of the adjourned meeting of the shareholders of the Combined Buyers Ltd., which took place yesterday, when Mr W. S. Bennett presided over a gathering of about 100 shareholders. They had four resolutions to consider, but when an amendment to one was lost a motion to. adjourn was m-ri-rl Mi,#! ilisv ell went home again.

The firßt point discussed was that of proxies. The chairman said that the voting power of ordinary, shareholders wae 13,196, and that of the preference shareholders 3299, while the preference shareholders Were entitled, to 25 per cent, of the vote exercisable. He gave a list of the proxies exercisable by individuals, and added that it had been impossible to determine with any certainty how many of the proxies were effective. The number of' proxies thrown out was 430. The chairman added that it Would be legal to elect the directors at the meeting, if Mr Taylor was removed. He (the. ohairman) had not previously entered into the controversy, and for this reason he had consented to become chairman of- the meeting. He had, however, to refute the statements of a. circular written by Mr L. F. Wallis and distributed to shareholders in the South Island. The statements Wore contrary to faot, and if he were in another part of the building he might be tempted to voa.ll them, something else. He then read the circular from, whioh, extracts are given bedow: — MR WALLIS'S CIRCULAR

"w£en we founded the company we put £4OOO hard oash into it,, as well as the business connection and goodwill of L. F. Wallis and Co.; Ltd., .at that time. To our subsequent regret we allowed Mr E. J. Stephens, who had been our book-keeper, to. .subscribe another £2OOO.- With that the , WallisStephens cash interest in the Combined Buyers amounted to £6OOO. • In. consideration of this cash and of our services as promoters we held ten preference shares, my father and myself six, Mr E. J. Stephens three, and Mr King one.

"These preference shares oarried the right to appoint half the (board. This was only reasonable.. . . . . ■ Unfor'tunately we- omitted; to- stipulate that the preference shareholders should have the right to nominate the chairman of directors, and the interests of the company eventually suffered seriously on account of this omission, "The second point was that the ten preference shares carried a , voting power of 25 per cent, of the subscribed capital. This precaution we’ took, as otherwise in the event of the company becoming particularly successful, the large petrol interests outside might buy up ordinary shares and endeavour to force tho company into liquidation. ... ' .. . “Under the artioles. of association, nothing in the way of interest, 1 bonuses, or other emolument is payable to preference shareholders until and unless the company has made a profit for that year, and during the last five years preference /shareholders have not received one penny-piece.” • , ' . “SPECIOUS PROMISES” Mr Wallis then went on .to say that during 'the time he was away at the war the company did not do any- 1 thing in the way of securing supplies of motor spirit, but, to his astonishment, oanvassers had been- allowed to go through the Dominion selling shares to car-owners on commission; collecting capital in the way they pleased. In fact,' it was only too plain that a large number of car-owners nad been induced: by specious promises' to invest money in the hope of obtaining motor spirit at low pnoes, while it was equally apparent that tne company wae not even attempting to carry out its bargain. He then interviewed Mr W. S. Bennett, manager of Dalgety and 00., Wellington, then chairman of the company, whose firm, it wag then alleged, were pole agents in various districts for the Vacuum Qil Company. Mr Bennett informed him definitely that they were not' going to import motor spirit. MR BENNET REPLIES In reply, Mr Bennett said that until October,- 1924, Dalgety and Co. had. never been agents lor the Vacuum Oil, Company. He had taken the chair-. man Ship of the Combined Buyers on the condition that he would be able, to resign should the interests of the - company and his firm clash. There, had never - been any difference of opinion regarding the importation of benzine during the whole time, he had been a director. It had been discussed, -but at the time other merchants were iosing money, and it was not thought advisable to tak© the risk. Mr Stevens had gone to America, hut had reported that the time was inopportune , to import benzine. Two- of their canvassers, who had succeeded. Mr Wallace, had been called to Wellington through a complaint by the Taranaki shareholders that they were corn-

mitting the company to the importation of benzine and they had been promptly "Backed.” They had' always made the position clear to canvassers. There was not a shadow of truth in the statement of Mr Wallis. Mr Wallis was a very able, young man and was quite capable of persuading some of the shareholders that black was white. (Laughter.) Mr R. ,S. Abrahams substantiated the chairman’s remarks. Mr- Thomas Taylor said that he knew nothing of the circular,. and dissociated himself from the statements made in it. ; MR WALLIS GN HIS FEET Mr L. F. Wallis said that shortly after the company had, been formed, he met a merohant in Christchurch who had landed 250 cases of benzine at 12s 6d a case when oases were selling at 17s 6d apiece. He thought they were thus under an obligation to do the same. He reported this to the board, but when he went into camp they did not take any.action. After he returned he interviewed Mr Bennett but ho was definitely against him. ' He then went to Australia where lie formed a Combined Buyers, and they were very successful in dealing in benzine. Mr Stephens supported the chairman in his statements. He considered -that Mr Wallace was "a hot air merchant who had gumshooed up the wrong tree.” Mr Sims said that they were. there to see whether the continue or abandon the company. . ’ The chairman: Yes, it is no good wasting time, and I think that we will take the resolutions. He said that there was. ft resolution for the removal .of Mr Taylor, and another desiring the company to go into liquidation. , , Mr R. S. Abraham then moved that they go into liquidation. If the shareholders desired they could start afresh., LIQUIDATION OR INQUIRY? The Hon. T. W. Hislop raised the question of false proxies, and ,Mr T. 0. A. Hislop. said that appropriate action would be taken by tne signatories against the person responsible. Mr T. O. Caverhill (Christchurch) said that at a meeting of shareholders in bis town, they had decided by 15 votes to one to liquidate.with a view to getting rid of the preference shares; ‘ ‘T. have taken a cold-blooded and impartial view* of the proceedings, and to my mind’a- committee should be' set up to inquire into the business, They should then submit a report to a meeting called by them,” said Mr .T. G. Brechin, and he moved in that direction, adding that they Rhould receive a remuneration of , not less than 100 guineas each.' He thought that the committee should he an independent one, and he suggested the names of Messrs H. D. Hunt. C. M. Bowden, and the chairman. There was £l3Ch--000 worth of capital at stake, £30,000 in stock, and still greater than that the reputation of some of the men who had Been actively concerned in the company. The discussion up to, the present had been between two factions, and . had been . of a personal mature. Liquidation was . the line of least resistance, but it was seldom the; best poliov. They must protect their capital. Mr Abrahams:. That is quite a sensible statement. MUCH CAPITAL AT STAKE Mr Williams said there was no chance of the amendment ried as the preference shareholders held 25 per cent, of the votes. , , Mr Bennett: How do, you know they are going to vote against it? " ’Mr William*: They would be mugs if they didn’t. I would do so if I were in their position. Mr Barton seconded the amendment pro forma, •Mr Taylor said that while they were wrangling valuable agreements were being imperilled. The .company was m a position, the buildings and fittings were valuable assets, and, apart from the Btock, everything was in good order.

In the afternoon, argument continued, but little progress was made. There was a consensus of opinion that. the preference shareholders dominated the meeting, and ordinary shareholders were desirous of knowing their opm-

Mr Wallis agreed with the amendment, hut before he would use his preference shares towards carrying it he wanted to see the other resolutions put to the meeting. He was sure the business would succeed, and he wanted them to adopt a proerowive policy. . Mr Robieson declared that Mr Wallis could not possibly be in fayour of the committee, as he was getting ,£ISOO a year from the company. He had been so busy gathering proxies* that he had not put in a single order since April last. In reply to this. Mr Wallis said that ha would give £IOO to any hospital if Mr JRobieaon could prov© that he had uoty'made more for the company in five months than he had drawn in salary in eight.. Mr Robieson had been beaten twice, and why should he go ,on wrangling? Mr Abrahams: I think we should adjourn to the biggest Chinese laundry. “THE REAL POSITION" Mr E. P.’ Hay said that if they adjonrned the meeting, fresh proxies would come out for the next meeting, and they would still he in the same position The wrangle was purely a personal one. • The facts of the case were •’—They had had a totally inadequate turnover for capital in recent rears, the building in Christchurch had been an absolute “dud,” and the shareholders were not supporting the company. There were tremendous possibilities for the company if they would only work in unison. • After further discussion, it was decided to take a poll, which, as forecast, was lost. The hour was 6 p.m. While the poll was being taken, Mr Wallis again reiterated his statements as regards his position. He said that

the etatemente in the circular be had sent out were facts. The chairman controverted this, and after another animated discussion it ■tfas on the voices, to adjourn the meeting. After this had been agreed to. Mr Wallis demanded a poll, but the chairman ruled that he was too late. ■. Thus ended another meeting at Which nothing was done.