“IN A NEW GARB”

Poverty Bay Herald, Volume LXI, Issue 18559, 20 November 1934, Page 7

“IN A NEW GARB”

INVESTMENT TRUSTS REORGANISATION PLANS COUNSEL’S PROPOSALS (Elec. Tel. Copyright-—United Press Assn.) SYDNEY, Nov. 19. Presenting a new scheme for tho reconstruction of trust companies, Dr. F. Louat told the commissioner, Mr. Justice Halse Rogers, that it was proposed to eliminate all the smaller companies and reallocate their assets to the main companies. Oil the elimination of the subsidiary companies .the trust organisation would consist of the Investment Executive Trust, Southern British, National Trust and British National Trust. ,It. was proposed that the articles of the Investment Executive Trust and the Southern British Trust be altered to provide for boards of seven directors of whom two would be elected by the shareholders and five by the debenture holders. Tho inclusion of two shareholders’ directors, he said, was entirely calculated to servo the interests of the debenture holders in that it enabled them to retain the assistance of McArthur and Alcorn in a deliberative capacity. He pointed out that provision for five directors farming a quorum would ensure a majority of the debenture-holders’ directors being present at all meetings. NURSING THE ASSETS In regard to the British National Trust, it was submitted that there should be a board of six directors, two of whom would bo appointed by the shareholders, and two each by the debenture-holders of the Southern British and Investment Executive Trust. Four directors would constitute a quorum. As tho last section of the plan it was suggested that with a view to strengthening the financial structure a new mortgage should be raised to replace the existing mortgage on the Trust building at a substantially lower rate of interest.

The commissioner remarked that it might be advisable to get what was possible by nursing the assets rather than running the risk of losing everything. If the debenture-holders approved of the scheme he could do nothing but recommend it. Perhaps the scheme could be modified a little. Mr. Monahan: If tho scheme is modified, Dr. Louat will lose all intorest in it. All these moves arc being mado to cover up your previous findings, and to put the matter in a new garb. Personally, Ido not think there is tho slightest hope of the public contributing any further money to these companies. Mr. Pitt, K.C., said lie represented 32(i debenture-holders whose subscriptions to companies totalled nearly £47,000 Air. Swan, of New Zealand, had handed him a proposal which would be put before debentureholders. The New Zealand scheme was similar to that put forward by Dr. Louat, suggesting control by de-benture-holders, although there were certain differences respecting detail. Ho suggested that he should be allowed time to confer with Dr. Louat and try and reconcile differences. RENT OF TRUST BUILDING The commissioner said that any scheme would have to bo feasible, otherwise it would be idle to put it forward. A. statement should be prepared showing tho debenture-holders’ financial advantage in any particular scheme. Tho commissioner recalled AV. C. Hewitt regarding the Tents from the Trust building. Hewitt said they totalled about £SOO a month. The building was not fully let, as difficulty was being encountered by uncertainty regarding the future of the companies. AVhcn prospective tenants realised that there would be continuity of occupation the remainder of the building would probably soon be let.

Tho commissioner said that before the value of £300,000 could be placed on the building tho rents would have to aggregate about £16,000. Before adjourning, the commissioner asked that the schemes of Mr. Pitt and Dr. Louat should be submitted to Mr. Hill, an accountant, for a report to the commissioner. The commissioner said he would receive counsel in his chambers if they ■wished to adopt his suggestion for thrashing the matter out there. Tho inquiry was then adjourned till Friday.