EXAMINATION OF DIRECTORS

Southland Times, Issue 24210, 21 August 1940, Page 8

EXAMINATION OF DIRECTORS

TOBACCO COMPANIES IN LIQUIDATION SUPREME COURT HEARING RESUMED (United Press Association) AUCKLAND, August 20. The public examination in the Supreme Court of two directors and officers of two tobacco companies now in liquidation, Loyal Limited and the Consolidated Tobacco Company Limited, was resumed today. The directors concerned were Edward Valentine Owen, of Howick, and Michael Maher, of Wanganui. Edward Valentine Owen gave details of the payments made to him for the purchase by the company of his blends : and formulae. In June 1234 he received ■ £3OOO and a month later £lO,OOO i through a Mr Gibson, of the New Zealand Investment Trust, who held the j power of attorney and took 10,000 shares I 1 in the company. For several months he ;

was in constant touch with Gibson, while the Loyal Ltd. company was endeavouring to raise its capital to £100,000.' Gibson suggested this and favoured a general amalgamation of various tobacco companies. Berkeley was not the solicitor for Loyal Ltd., but acted as negotiator. He paid Berkeley more than £2OOO for his services and paid Maher also more than £2OOO. At one stage he quarrelled with Mr Gibson and broke off the negotiations with him, but later they got together again and he got Mr Gibson’s demands on the Consolidated Tobacco Company reduced. The amalgamation with the Consolidated Tobacco Company took place in June 1935. In an agreement Gibson and company got £13,500 commission, half from each company, the Consolidated Tobacco Company taking over the liability of both companies. Loyal Ltd. ; had to raise its capital to £lOO,OOO. A ; dividend had been paid by Loyal Ltd. at the end of the year in April 1935, but he could not remember if it was paid by borrowed money. The sum of £5OOO was borrowed from-the New Zealand Investment Trust. In a letter to shareholders advocating amalgamation, the witness did not mention the cost in commission. 1 The witness was examined as to - items in the Loyal Limited prospectus J to raise £70,000. He did not agree that £ £BOOO was short-paid in duty, and the i

prospectus did not show that such, an amount was short-paid in the previous year’s operation. The £70,000 was obtained from the public. When examination of this . witness ended the Court adjourned until tomorrow when his re-examination begins.