A LIVELY MEETING

Southland Times, Issue 19279, 25 June 1924, Page 6

A LIVELY MEETING

FARMERS’ TRADING COMPANY. PROFITS AND PREFERENCE SHAREHOLDERS. (Per United Press Association.) AUCKLAND, June 24. The annual meeting of the Farmers’ Union Trading Company was attended by 200 shareholders and was lively at times. In the absence of the Chairman of Directors through indisposition, the chair was taken by Mr A. A. Ross, who moved the adoption of the report and balance-sheet, indicating a profit for the year of £10,209 and recommending the payment of that profit to the holders of A preference shares, to get rid of the liability to such shareholders. The chairman stated that an independent report on the business had been made to the directors by two outside auditors. Parts of the report he read to the meeting, indicating that the business was on a good footing. Mr Hannan: What does the reserve fund amount to? The Chairman: There is no reserve. Mr Hannan: Is not the Bank due £67,000 at 6| per cent? Mr Laidlaw stated that when money was raised to meet bond holders the Bank was given a mortgage on the company’s big buildings. Mr Hannan said he wanted to know what value the company had been to the country. It had taken their money and had given them a scrap of paper and what was it worth? A voice: You are going the right way to Lose it all. Mr W. Atwell objected to the payment of £lO,OOO profit to holders of A preference shares. It should be used, instead, he said, for the replacement of the lost, capital of the ordinary shareholders.— (Applause). The Chairman: By the articles of association the directors can do nothing other than is proposed with the profits. Mr Atwell held that this way of dealing with the profit would bring ordinary shares lower than at present. The money should be used to build up the ordinary shares, not to pay off losses. The Chairman stated that the position was governed by a Supreme Court ruling to the effect that profits could not go to ordinary shareholders until the liability to preference shareholders had been liquidated. Another shareholder moved as an amendment that the Chairman’s report be adopted with the exception of the recommendation that the profits be applied to reducing the liability to holders of A preference shares. The company’s solicitor stated that the money had to be applied as suggested by the directors, according to the articles of association, and the amendment was ruled out by the Chairman.

Other shareholders supported the Chairman, saying that the company was in a good position, but a motion that the questino be now put was lost by a large majority.

Messrs Fitt and Hannan endeavoured to speak again, but were ruled out of order by the Chairman to the accompaniment of calls from excited shareholders: “Your ruling is rotten,” while Mr Fitt stated it was quite clear that the shareholders were determined to find out just where they stood.

Mr Fitt insisted that he had a right to move a further amendment, “that the meeting be adjourned for two months pending the investigation and report on whether there really was any profit, having regard to the outstanding accounts and depreciation on building, plant and fittings.” The Chairman replied that the solicitor had advised him that the amendment was not in order.

Mr Hannan: They’re hiding; they’re frightened. The Chairman: I will ask you to listen to the Company’s solicitor. Mr Hannan: We won’t hear him; he has no right here. He is not a shareholder and you stopped Mr Hudson. Then came a sheaf of motions that the meeting disagree with the Chairman’s ruling, that he leaye the chair and that the meeting adjourn. Finally after an adjournment for lunch, the Chairman’s motion was carried after a division, the Chairman having ruled that they must either accept or reject it. There was further long discussion, heated at times, over a motion to consolidate the articles of association, which was adopted. These new articles considerably reduce the privilege of “A” preference shareholders.