NEW ZEALAND HOME BUILDERS

NZ Truth, Issue 580, 29 July 1916, Page 5

NEW ZEALAND HOME BUILDERS

k mm discussed concern

AN INVESTIGATION CORKS REPORT CONSIDERED

A Loss of over £22,000

Some light was thrown upon that much-discussed concern, New Zealand Home Builders, Ltd., on Wednesday afternoon of laßt week when an extraordinary meeting of shareholders was held at the Chamber of Commerce, Auckland. , „ ' The meeting was called to consider a report and balance-sheet presented by ■■ - ■■/ . -i AN INVESTIGATION COMMITTEE,' consisting of Messrs. B. Dive, W. Andrew, J. B. Bennie, W. A. Edwards, M. J. Bennett, M.JEL Hampson, and C. W. Pottertion. The Investigation Committee was appointed at a general meeting of shareholders on April 17 of this year, the object being to have the correct position of the company's affairs placed before shareholders. Rumor had been current for a long ti,me that the position was far from satisfactory and as the true facts gradually became' known the shareholders deemed it advisable to have the matter gone into thoroughly. The work was undertaken by 1 the Investigation Committee mentioned above and instead of the business showing a profit of £14,000, as set out m the, last balance-sheet, it was fathomed that the loss . amounted to £22,462 15s. 7d. A proposal was then made that the Home Builders should go into liquidation, and it was to discuss this that the extraordinary meeting was held. ' There were ' about 75 shareholders present, Mr. M. V. -Wheeler, one of the directors, presiding. :■ •' The chairman stated that the articles of association' provided that only shareholders were entitled to be present at the meetings and he sought an expression of opinion as to whether the press should be allowed to remain. It was unanimously decided m favor of the press being present. • The chairman of the Investigation Committee, Mr. B. Dive, after stating the object of the meeting, said he wished those present to refrain from any personal remarks they felt inclined to make and not allow any personalities to creep m. With three other shareholders he had been appointed to investigate the company's affairs m the interests of shareholders, and, m addition, they: had engaged counsel »nd also an accountant. The books and In fact the whole business of the Home Builders had been thoroughly gone into. The shareholders would see the position for themselves from the-print-ed report distributed. At the very commencement the "Investigation Committee gleaned that the company had incurred large liabilities and was under heavy obligations. There were securities, certainly,* but though these might be considered gilt- exiged, it would be hard to finance them and it would be very difficult to induce people to take them for anything like a fair advance. However, this difficulty had been got over and he wisbedi to tell shareholders tha,r m thenexj; 15 months they would be able to. wipe off, the amount they owed. (Applause.) Provision had been made to meet all liabilities. It was really not the part of the Investigation Committee's duty to deal with the company's finance, but he waa pleased to say that : the directors had acceded to tho request that the Committee should b 6 permitted to do the financing. Over 100 summonses had been issued against tho company, but he was pleased to say that he had sent out circulars asking that claims should be delayed for a lime, and m the majority of instances the request was met The Committee had also learned that the company had been sued, and m many cases no defence was entered and Judgment went by default This was bad, or perhaps unfortunate, and what should have been done was to .have confessed Judgment and thus avoided publicity. The balance-sheet, as would bo noted by shareholders, showed an approximate loss of £22,000, but In fairness to the directors It had to be noted that there was no allowanoe for depreciation. The Committee's valuation of the stocks was m tho vicinity of .£9OO0 — this showed a loss of £11,000 • and the directors' valuation exceeded thlc by £ 1500, but In any case £9600 had gone, and he would |ike tho directors to ■ay where it had gone. (Hear, hear.) WHAT WAS? WANTED was the realisation to exceed valuation. Touching the securities on buildings, (shareholders had to take the face value a-» correct. ( Tho profit on buildings totalled £1449. a .very small profit connldcrLrig the extensive operations of the company. An independent balancesheet had been drawn up by Mr. GrlerHon, and this allowed a loss m tho company's workings of Bomowhore about £22,900. . Tho speaker went on to say that he did not think It would bo very far out if tho losses wore put down at £22,000. Shartiholderu would see Ihe position, anil the question io be considered was whether the company fchould go Into liquidation. The committee ulao recommends that the present directors should be u&ked to rekign, and also thru certain local proceedings should ho taken. He did not want to tllseusH tho reason* lor ti'oso recommendacfan.*. liiit tli« snnrenoldcnt could'- » - <-«t iH*urc<l that- t."o recommendation"! were mud? u'tor most careful deliberation. Tho inter- *«« of fthuroholdorK would bo iho chief object, nnd he thought l lml if they decided tho question of liquidation, or continuing on, it would be •ufllelent for the time being, tor hl» own part he could not aeo how 'hey were to continue nif they were £23.000 to the bad, unil they had no cipit.il, which wan, of course, the crux oC the potation. If It wuta decided tv erect btilldiiuc!), where was the money comInic from? It wan for tho Hharchohlen? to way whether thoy woro prepared to put moro money into the business to give It tho required flUtp to make It a HtJcceuK, but h> feared thut if he wont round th« meeting nnd solk-ltM thotf't prenent, ho would not meet with much response. In Urn PACK OF THE PIUCSfcNT POSITION' of tho Company's affairs ho held tho opinion that liquidation was tho bint Tj^albt© way out of tho difficulty. Tho Urtmnoe-»hect« of the Company and th« Investigation Committee showed a difference of £37,1)00. Mr. Dive then moved: Thnt the present director* bo A»ltcd to reslK», and that n now board bu olecteel; that Icgnl prococ<l!np» bo taken agnln*t iiueh persons; as counsel may ad vino m connection with the Company's lO«8O8. In seconding the motion. Mr. Hampton wild thai tho Kharuhoidcm could have no confluence m tl»© present director*. Two nf the director*. Mr. Ro««Kitcr <tmt Frof«»*or Bc«nr. had not In any way cr>mrihutr<l to tho pofiltlou n* they bad only recently joined tho board ftfid bad donu nil m their power v, assist iho jharoholdor* He would

like to express sympathy with them. Mr. Wake suggested taking the recommendations singly and not as a double-barrelled motion. Mr, Rossiter and Professor Segar had come to the rescue, and it was unfair to ask them to resign. Another shareholder asked what assurance they had that the present : directors would resign. Mr. A. Cleave (one of the directors) replied, that they would resign, whereupon the inquirer said that the shareholders could recognise Mr. Rossiter and Professor Segar' s efforts by reappointing them after all, the directors had resigned. This met with the approval of those present. The resolution was then put and carried unanimously. Mr. ' Hampson. then moved: That the company be voluntarily wound up. He said that liquidation did not necessarily mean sacrifice, but they could not get away from the fact that a loss of £22,000 was showing. THE 1 LOSS WAS THERE' and >the question was, whether they were going to realise it. t Mr. Dive seconded the motion, and said that it would be necessary to put m considerable capital to carry on. Mr. Bennett said the question of going- into liquidation was a serious one, and he supported carrying on. He was' a member of the committee, and with a large number of fcouhtry shareholders he favored continuance. The motion was then put and lost, 10 voting 'for it and 65 against. In order to overcome any technical difficulties the names of the new directors were added to the existing directorate, the latter having given an assurance that they would retire. The ballot for positions of the new directorate resulted m the election of Messrs. S. T. Rossiter, W. Andrew, F, T. Mannsell, M. J. Bennett, G. L. Winger, B. Dive and L. J. T. Blsson.

A vote of thanks was passed to the members of the Investigation Committee for their efforts on behalf of shareholders.