BOND INVESTMENTS

Poverty Bay Herald, Volume LXI, Issue 18551, 10 November 1934, Page 5

BOND INVESTMENTS

PROTECTING THE HOLDERS • * ’ NEW LEGISLATION - CONTROL OF COMPANIES (Parliamentary Reporter.) WELLINGTON, this day. That the interests of bondholders was being safeguarded, was a point strongly made by .the• Rt. lion. J. G. Pontes, Minister of Finance, when Hie

Com pan ios (Bondholders fncorpora lion) Bill was introduced by Governor’s Mess I ,age in the House yesterday for the purpose of circulation, and being dealt- with next session.

The title, of the measure describes the whole purpose:, “To make provision for the incorporation of holders of bonds issued by certain afforestation and othar companies for facili tating the realisation of land or produce affected by such bonds, and matters incidental thereto.” Mr Coates said that although the bill was required urgently, it would not be passed this session. Parliament would be asked to pass the measure when it nffit next year. “Will that be in February,” queried Mr W. E. Barnard (Lab., Napier). “Yes, or perhaps sooner,” was the non-committal reply of the Minister, who added' that there were between 40 and 50 bond-issuing companies operating actively in New Zealand in timber, flax, turig oil, and so forth, and justification for the legislation ivas to be found in the investigations of the Companies Commission. INVESTORS SCATTERED The solicitor to one of the big companies and representatives of four other companies had asked that the bill should be passed at once for the reason that; some of the concerns wished to devote capita) to the installation of mills, and were unable to get into touch with (heir bondholders, who were scattered throughout the world. They had asked that a commission should be appointed to supervise and consider recommendations for the purpose of converting bonds into shareholding capital. The companies could agree among themselves as to the 'Methods to be adopted, and it,was for the commission to sec that the interests of bondholders were not prejudiced by the rearrangements. The companies had reached a stage front which they could not move, and could not legally turn any 'Of the capital into commercial undertakings. Approximately £500.000 would, it was estimated, be available when the bill was passed, and most of it would be utilised in labor. lie did not think that the postponement of consideration of the measure would prejudice the interests of 'bondholders. ..Parliament would pass the legislation when it reassembled. STATE NOT INVOLVED Mr Coates emphasised that the duty of the commission would bo to see that the interests of the bondholders were protected. Four of the companies wished to start immediately. Tn the long .run, it was quite possible that some would go out, 'but that had nothing, to do with the commission. Mr F. Jones (Lab., Dunedin South): Will there be any Government examination of balance-sheets? “No,” replied tho Minister, who added that tho costs of the commission would be borne by the companies. There would be no cost to the Government.

i “The companies themselves have asked for this,” said Mr Coates. “There is no State help, nor is there any warranty for a statement that the State is interested in any way. It is not. It is merely setting up the machinery, and the companies are pay mg for it.” Mr A. J. Stallworthy (Trul., Eden) asked whether it was correct tnat a prominent Aucklander had seen the legislation about four days ago. The Minister replied that it was quite possible. A number of solicitors saw the bill in memorandum form, since the measure was .the result of negotiations which had ex tended over a long period.

The bill was read.a first time. ' It. does not specify any particular companies. ■