Skipper Lysnar's Sad Steamer

NZ Truth, Issue 998, 10 January 1925, Page 5

Skipper Lysnar's Sad Steamer

She Put Company On Rocks Poverty Bay Farmers Meat Directors Persist In Solemn Farce To Talk Of Remaining Mortgage As If It Were Total Cost Is Humbug— Company's Capital Is Lost • (From "Truth's" Gisborne Rep.) "Truth's" Gisborne rep. exposes the farce of pretending that the Poverty Bay Farmers' Meat Company shareholders can possibly redeem themselves through the steamer Admiral Codrington. He shows that the £60,000* mortgage mentioned m the annual report is hardly a tithe of the cost of the vessel. She wrecked the company, and to expect her to rescue the survivors is ridiculous. The company's annual report is audacious humbug.

The annual meeting of the shareholders of the Poverty Bay Farmers' Meat Company, held at Gisborne lately, reminded one strongly of a Gilbert and Sullivan, opera, many of the statements made being of a decidedly ludicrous nature. The Chairman of Directors, Mr. "W. D. Lysnar, had things all his own way, and the shareholders present, who actually ' represented little more than one -tenth of the paid-up capital, passed resolutions to their hearts' content.

The annual meeting of the company was ,not heralded with any fanfare of trumpets as m -past years, and many of the shareholder!; who were away on holiday when the notices were sent out, did hot know that the meeting was being held at . all. The result of ■this was that, there was a very miserable attendance, the total capital

represented being £35,313, out of a capital of £ 304,140. Practically none of those who have disagreed with the policy laid down by the chairman was present, they evidently considering that as they had lost all it was hardly worth while to go and indulge m mutual recriminations. The annual report was a work of art, and ' When it was read it was difficult to imagine that the company m Question was one which had had its works sold over its head and whose guarantors had been called upon to part up £68,000 hard cash. Far from criticising it, however, the , meeting passed it. unanimously, without discussion, and then proceeded to hand out compliments to the directors, whose policy was responsible: for the present position. ... WORKS "SACRIFICED/ • The report commenced: "The,, final adjustment of the company's' affairs with the National Bank of New Zealand, who sold the works to- Vestey Bros in' 1923/ at a price which was.a sacrifice value! ihas resulted in -certain of your directors having to become resporilble^f or. about £68,200^ to hqmaat^the balance'due to the Bank after the sale had been earned out m terms of their joint and 'several guarantees tO "Truth's" rep. here remarks that the "sacrifice" price paid by Vesteys.for the works was £225,000, a price whicn could not have been' obtained from any other firm for the works. ■ Since the Ss were taken over, .Vesteys have had to stfend a considerable amount of money m remodelling: various portions, Sid before they have finished will haye spent well over £ 50,000, not m '™- provemehts, but; m repairs necessaiy through the neglected state of the Sorks when they took over. The question as to whether Vesteys should- have been allowed to buy, the works does not enter into the question _ at _ the present stage,. but to suggest that they acquired; them at a sacrifice is'-abso-luteW ridiculous. No one knows this better than the Chairman of Directors, Mr. W. D. Lysnar. THE PHANTOM SHIP. ''Dealing with matters m connection with the Admiral Codrington, the vessel which has been responsible for. all the troubles of the company, the report says: "The directors very, much regret having to report that,, through the hostile action of the New Zealand Meat Producers' Board, the ship Admiral C odrington : was excluded \ i irom last year's freight contract. This prevented" your directors from bringing the' Admiral . Codrington to New Zealand to take part m the New Zealand trade, but, fortunately, they were able to arrange certain freight - contracts with Argentine, which has enabled the ship to earn sufficient t.opay interest on. the. mortgage of £60,000 upon her and keep all other disbursements paid m connection with her, leaving,- according, to the .latest advices from Scotland, a credit balance, towards her future, working; and this after putting the boat m thorough order m view of her:- coming;; into the New Zealand trade: The -, directors consider that had. they - been ajlowed. to bring the boat, to New. Zealand, a very much -more,, substantial profit would have been derived than is. the case, at present; and' again; this year, while the Meat Boar,d had agreed m writing that .the boat . should be included in* future contracts, they have not fulfilled. ' this • promise and -are . at the present time refusing to allow the boat to center the New ZeaJand trade. . The directoi-s feel that •, there are. other influences at work with, the Meat Board wfiich are acting prejudicially to the interests of this company. . ..,-."• "In view of the Meat. Board shutting the boat put of the New Zealand trade it '■ is impossible for the directors to forecast what may happen m connection with the boat." . ■•■■ :. ■■;.■'•■. . , ■■•■; TRUTH ABOUgp THE 'PROFIT. - It will -be noticed m ; the.;foregbing j-hflrt-. tfrflt fepoj^aneiaU^ .tho^w^pr^

fit, and suggests that had the Admiral Codrington been allowed to enter the New Zealand trade the profit would have been greater. Such a misrepresentation m terms should not be allowed m an annual report, which is supposed to give an accurate summary of the position for the benefit of the shareholders. It is true that the majority of them m this case are aware of the bluffing policy adopted by the directors and the shuffling of the blame on to the Meat Board, the Government, or, m fact, anyone but themselves, but there may be a few— a. vex*y few — who take the report for gospel and who imagine that they are eventually going to get something out of the wreck. To bring about disillusionment is never a. pleasant task, but for the benefit of those few, and also for the benefit of farmers connected with other companies which may be embarking on dangerous policies, an accurate statement ,of the real position should be given. .'".■

The casual reader of the report would imagine that the boat had cost the small sum of £60,000 and would conclude that the deal had been a reasonable one! The actual. cost was £300,---000, but. an additional £118,000 was spent m insulating the boat, thus bringing its actual cost up to the enormous sum of £418,000. •Of this sum about £100,000' was raised m the form of fresh capital, £200,000 was borrowed from the bank on the. security of the works, etc.,. and .the ..remaining £100,000 was left on mortgage m England. This mortgage 'has now been reduced to £60,000. -Therefore, when, as stated m. the report, a profit ;a shown. on the mortgage of £60,000, the ship is actually showing a profit on only a little more . than one-seventh of her real cost. ; Ev.eb allowing for the fact that she might have made more if engaged m the New. Zealand trade, there ■is sufficient margin to show what a frightful piece, of bungling the pur-. 6hase was.

It is a well-known fact that the vessel is quite obsolete, and those m a position to know something about the value of ships say that there are grave doubts as. to whether, if sold, she would bring.* the £60,000 for which she is mortgaged.* Yet, m the face of these ' 'facts, the directors wonder why the Meat Board, do not want her m the. New'^ Zealand trade. No cargo was ever taken out of her m an absolutely satisfactory condition, and the Meat Board would be erring m its duty to the producers if the Admiral CJodrington were allowed to carry meat to England: THE FINANCIAL POSITION. The statement made by the directors regarding the finances of the company arid the actions of the receivers said: "The position of the company is substantially' the same as stated, m the last annual report, with the exception of the share capital (which has been altered by; the calling up of £10,400---10s of uncalled capital), which now stands as • under: .Nominal capital, 20,689 ordinary shares, 80S6 preference shares, 3082.. preference B shares, 28,971 shipping shares, 60,828 shares at £0 each, £304,140, less calls m arrears £26,870 8s 3d, paid-up capital £277,2159 lIS 9d. ■//!><* : .-.-■-, "Regarding 'the balance of unpaid calls, m accordance with the consent of the directors; the National Bank is entitled to-. a... further £3203 oi^ thereabouts, and as regards the balance ot £23,667', 25 per'cemt. is to go to the bank and 75 per cent, to the directors, which' the directors propose applying m reduction; of the moneys due under the guarantee, unless it becomes ne-

cessary -to. utilise any of it for the protection of the Admiral Codrington or other expenses incurred by the directors m the interests of the company. "Truth's" rep. here remarks that the statement of .the directors is accurate enough, but the>f act remains, that it will be. quite impossible to collect more than about £10,000 but of the £23,66. now outstanding m unpaid calls. it is doubtful indeed whether even this aiiio unt.will.be. collected. \ - : '■■.-■: FARMERS AND SHIPS. The comipany .got into its present deplorable position solely as the result of the purchase of the Admiral Codrington, and the major portion of the responsibility, for that purchase 'must rest with the directors, and especially with the. chairman, Mr. W..D. Lysnar, who all along held an exaggerated idea of the profits to be derived from shipping. -The bank; however, was not wholly blameless m that it encouraged a piece of reckless financing when its duty would have been to throw cold water oh .the scheme. The position is quite hopeless, and shareholders should not delude themselves into the belief that they may get something back. The* Admiral Codrington will eventually have to be sold, and this event may take place sooner than anticipated. 'It is very, doubtful whether she will fetch the price of th.c mortgage arid even if she does, there will be nothing left for the shareholders. It would certainly be better m the case of annual meetings m the. future if the directors took care to place the position ' accurately before the shareholders, without attempting comic opera touches when the true facts are known . from one end of the Dominion to the other. Everything has-been lost and it is useless . to conceal that fact;' moreover, it is doing, tho sliafe}jpl4ei£ an iiuusUce, , „;. ;