SOUTH OTAGO FREEZING COMPANY.

Otago Daily Times, Issue 20991, 2 April 1930, Page 6

SOUTH OTAGO FREEZING COMPANY.

TO THE EDITOR. Sri:. —Twelve months ago a meeting of •hareholders of the South Otago Freezing Company was held in Balclutha to consider the proposal of the directors to sell the works at a price that would return each investor the full face value—possibly 5 per cent, above face value. This meeting was engineered by a section of shareholders who foresaw, or imagined they foresaw, disaster if this proposal was carried out. Accordingly they staged an attractive counter proposal, viz., to buy out all " dry" shareholders at par within a year. So much eloquence and persuaviseness,were exerted that the directors were actually diverted from what was their duty to all shareholders that they actually allowed the counter proposal to go to a vote. " Dry " and dissatisfied holders had no earthly chance of protecting their own interests, as the articles of association of the companv gave enormous voting power advantage" to holders of small parcels. Consequently the counter-proposal committee were able to pet the directors to agree to this arrangement. This committee, although actuated by motives of fairness.

was nevertheless far too sangiue, concerning what could be done, in the face or 10 years' broken faith and broken promises. The actual position now is that " dry and dissatisfied shareholders are compelled to remain in this venture or unload at enormous loss, if they can unload at all. The directors have a duty to these holders, and if a satisfactory sale cannot now or yet be effected, what remedy can be offered? The company may never be a dividendpaying concern, and cannot be run as a charitable institution or as a benefit organisation for a few suppliers who geographically ale favourably situated. It was expressly and- forcefully impressed on this reorganising committee by at least three of the directors at the meetinc that they expected these promises to be fulfilled, and if the farmers let this committee down the committee in turn would let the directors down, and they in turn would be compelled to let the works down. What is the position now? With reference to the letter from Mr James Wood, does he express the sentiments of his union or his personal views. Does he seriously believe that any other company or owner could dispense with the employment of In hour, and what does he mean by saying that the one fault is that these wages are not distributed amongst more workers? Does this imply that the present workers are overpaid.' —-I am. etc.. Common Sense.