A SHAREHOLDERS’ GRIEVANCE.

Otago Daily Times, Issue 21269, 25 February 1931, Page 6

A SHAREHOLDERS’ GRIEVANCE.

The directors of the Bank of New South Wales have no cause to complain of intemperateness in the terms in which New Zealand shareholders in that institution have protested against the decision that the dividends declared by the bank shall be paid in Australian currency. The New Zealand shareholders may feel, as doubtless they do feel, that a grave injustice has been done to them in the deduction of 3s 6d in the pound in the amount of their dividends, but their objection to the decision of the directors of the bank has been generally expressed in moderate language. Their case is, indeed, so strong that the mere statement of it is almost sufficient to carry conviction. It is actually supported by the explanation of the principles governing the payment of dividends that was furnished a few days ago by the general manager of the bank for circulation in New Zealand: “The general rule of law affecting dividends is that no one shareholder is entitled to receive from a company, per unit of his holding, any more than any other shareholder.” Precisely; and it is the observance of that rule of law which is desired by the shareholders of the bank in New Zealand. The effect of the decision of the directors is that the Australian shareholders are accorded a very material advantage over the shareholders in New Zealand. It has been estimated that the differentiation that has been made between the Australian and New Zealand shareholders' will retain in the Commonwealth, in the service of the bank, about £-16,000 which should, if the dividends were paid on a par basis, have come- to this Dominion. It is claimed, however, by the bank that it is acting under legal advice that it is bound to pay its dividends in Australian currency. If that is sound advice, as presumably it is, the New Zealand shareholders, who are said to be 1600 in number, have been seriously misled, both by the fact that the bank possesses a New Zealand register and by the belief that it is, as has been argued, really domiciled in New Zealand. And these shareholders will not agree that the advice by which the bank has been guided has deprived them of a substantial grievance. ,