PROTECTION OF INVESTORS

Taranaki Daily News, 26 January 1934, Page 7

PROTECTION OF INVESTORS

NEW ZEALAND COMMISSION ORDER OF REFERENCE GIVEN OPERATIONS OF COMPANIES POWER TO CALL EVIDENCE By Telegraph—Press Association. Wellington, Last Night. The order of reference of the special commission which has been appointed to investigate the promotion of financial methods and the operation of certain companies in New Zealand was gazetted to-night. The personnel of the tribunal was announced just before the end of the Parliamentary session last month by the Minister of Finance. Mr. J. S. Barton, SM., Wellington, is chairman of the commission and the other members are Professor H. Belshaw, Auckland, and Mr. F. E. Graham, Christchurch. The tribunal is described in the order of reference as “A commission to inquire into and report upon tendencies and developments apparent in the Dominion in relation to the promotion of financial methods and the control and operations of certain companies and other corporations which seek to raise capital and loan funds in the Dominion.” The commission will inquire more particularly into the following matters: The methods of promotion and administration of such companies, including their subsidiary companies and syndicates, the scheme of control of such companies and the relative power and right of the promoters, subscribers of shares and subscribers of debenture, bond or security certificate issues, the financial schemes of such companies, with particular reference to the relative application of the companies’ and bondholders’ property funds to (1) the remuneration and profits to the promoters and subsidiary companies, (2) the formation, working and administration expenses, and (3) the protection and furtherance of the interests of the holders of longterm debentures, bonds, security certificates and like instruments or securities, whether the benefits which may be found at present to accrue to promoters or shareholders in bond issuing companies through the surrender or forfeiture of bonds should be applied and credited to the bondholders’ funds in the particular group or series of any such bonds surrendered or forfeited, or otherwise whether the provisions of the Companies Act, 1933, relating to prospectuses and otherwise requiring the disclosure of material contracts and transactions are reasonably adequate to protest intending investors in shares, debentures, bonds, security certificates and other like instruments, the financial structure of financial, investment and trust companies, and as to whether any additional legislative provision should be made to afford investors a greater measure of protection for their capital moneys and other interests in such companies. The commission will further inquire into the desirability of regulating in the public interest the formation and operation of trust companies and investment companies dealing 'in company shares, Government, local body and other forms of security, and the operation of the present status governing the constitution and regulation of stock exchanges in New Zealand.

The commission shall also report generally upon what steps, if any, should be taken by way of modifying the existing statute law and regulations, having regard to the present and prospective welfare of the investing public and ; the community generally. The commission is authorised to conduct its inquiry at such places as are deemed expedient and to call and examine on oath such person or persons as are considered capable of affording information that might be required. Authority is also given for the commission to call for and examine books or records deemed likely to afford information on the subject matter of the inquiry.

The commission, is required to report by April 1.