THE MOUNT LYELL COMPANY

Otago Daily Times, Issue 22421, 16 November 1934, Page 10

THE MOUNT LYELL COMPANY

TO THE EDITOR Sir, —The directors of Mount Lyell. Ltd., have informed the New Zealand Stock Exchanges that they do not intend paying a dividend this year. One would have thought some explanation due to shareholders in New Zealand. The directors would indeed be hard put to provide a plausible excuse for the action they have seen lit to take. Those who place savings in small concerns with weak assets and paltry reserves do so at an obvious risk. An adverse year with no resources upon which to fall means no distribution. It is bad luck, but the directors in such a case

have no alternative. When money is placed in a concern such as Mount Lyell, with workable reserves almost touching the paid capital; with assets 38s per 20s share, it is done for safety—safety in regard to both capital and dividend. Those who thus invest in goOd_ faith have every reason to expect that faith justified. The reserve fund is the property of the share* holder—it is contributed to in good, fat years in order that it may be available should adverse times come. I do not think Motmt Lyell has suffered to any marked extent. But even if (to put it at its worst) no actual profit has been made, the reserve fund is there to meet the need. Why, then, has no dividend been paid? I am a widow and I stand to lose nearly £SO through this decision of the directors. —“I am, etc., G. P, F. Dunedin. November 11.