DEBENTURE INTEREST

Stratford Evening Post, Volume II, Issue 224, 20 April 1933, Page 6

DEBENTURE INTEREST

Money Borrowed by Local

Bodies

PAYABLE IN N.Z. MONEY

Press Association —Copyright

Auckland, April 19. The opinion that where a local body has borrowed money overseas and the debenture interest ■.as at the option of the debenture holders—payable in New Zealand or in London—payment can be made in New Zealand with New Zealand pounds was expressed at the Auckland Transport Board meeting to-day by the chairman, Mr. J. A. C. Allum. He said this meant that the exchange rate did not apply. It was a matter of the greatest importance to local bodies. Mr. H. G. Mason, M.P., said it would be a matter of some concern to the banks also.

Mr. Allum quoted a decision of the English Court of Appeal in the case of the Broken Hill Proprietary versus Latham and others, that where the debenture issue was at the option of the holders—payable in Australia or London—the payment in London to the holders on the Australian registry could be in Australian currency if the holders exercised the option to be paid in London. This decision, said Mr. Allum, appeared to affect the board.

The board referred the matter to the finance committee.