DEAL IN TOBACCO

Poverty Bay Herald, Volume LX, Issue 18258, 29 November 1933, Page 7

DEAL IN TOBACCO

FAILURE OF COMPANY ACTION BY SHAREHOLDERS REFUND OF PAYMENTS (Per Tress Association.) AUCKLAND, this day. Eight, shareholders in the Premier Tobacco Company (N.Z.), Limited, took action in the Supreme Court against the company and William Samuel Russell, stated to he the promoter and a former director of the concern.

The plaintiffs, who were represented by Mr. Mackay, asked that their contracts to take shares in the company should he rescinded; that their names should bo removed from the register of the company; and that they should be refunded certain sums of money paid for shares.

The defendants were represented by Mr. Wilson.

Mr. Justice Smith was on the bench

In accordance with an agreement between counsel, the proceedings against Russell, who wns stated to be in England, were adjourned sine die, to lie brought on after seven days’ notice following his return to New Zealand.

Mr. Mac kay said the actions arose out of applications by each of the plaintiffs for shares in the defendant company, which was represented to be a concern for the manufacture of tobacco and cigarettes, and was registered in March, 1931. The prospectus on which the shares were, sold was a highly colorful document, and represented that the company was formed with a strong financial group in London known as the Eeronne Syndicate. The plaintiffs’ shares were all purchased as a result of this and other representations in the prospectus. LIABILITY ADMITTED

Since the proceedings were instituted, continued counsel, the defendant company. had gone into liquidation. The liquidators, however, had agreed that the plaintiffs were entitled to a cancellation of their shares, and judgment against the company for the amounts claimed. They only asked that the amounts claimed should be proved. Evidence was given by George Parkes, secretary of the defendant company from its formation until its liquidation, that tlie company’s register showed the amounts paid by the plaintiffs to be as follows: Edward Michael McGinlev, £312; John Martyn Wilson, £500; Professor Algernon Phillips Withill Thomas, £300; Mrs Sarah Elizabeth Morris, £75: Oliver Keith Lamb. £SO; Otto Richard Buchanan, £100; Alfred Henry Lindon Madderford, £lB7 10s, and Charles Medley, £125. The witness said shares in the company were now valueless, and were absolutely unsaleable. The company went into liquidation on November 20. By consent of the liquidators, as e.\ pressed by Mr. Wilson, His Honor rescinded the contracts to take shares and directed that the plaintiffs’ names should be removed from the register of the company. He also entered judgment against the company in favor of each plaintiff for the respective amount paid to the company upon shares acquired. The question of costs was reserved.. It was made clear that the decision in the proceedings against the company would not prejudice the ease of the defendant Russell in any future litigation.