COMPANIES’ OPERATIONS

Taranaki Daily News, 8 September 1934, Page 6

COMPANIES’ OPERATIONS

TARANAKI MONEY INVESTED NOT SOLD ON THE OPEN MARKET EXTENT HARD TO DETERMINE. BROKER EXPLAINS POSITION. Taranaki investors have, to some extent, contributed capital to the companies whose affairs are at present the subject of inquiry by the commission which has already presented interim reports in the House of Representatives. Debentures have been offered for sale in Taranaki, but what total sum is involved cannot, at present, be determined with any degree of accuracy. “There are certain rumours,” said one New Plymouth stockbroker, when interviewed yesterday, “but it is difficult to decide what is the truth and what is not. The transfer of debentures was most probably effected between vendor and buyer direct, and the script itself never came on to the open market. Until the commission makes its final report and the entire matter is concluded it is impossible to gauge the scope of the companies’ activity.” It was further explained that most of the concerns affiliated with the New Zealand Investment Executive Trust Ltd. were private companies, ineligible for registration aS public companies, because the actual shareholders numbered fewer than seven. Investors subscribed capital for the development of the company’s activities and were issued with debentures as receipts. In every instance of which he was aware these debentures had been transferred as the result of private negotiation. He was aware of no broker in the ordinary way effecting regular transfer of established company shares who dealt with them.

When asked what would have been the position of an ordinary broker requested by a client to buy the debentures in question he replied: “If a client had asked me to purchase these debentures I would have been forced to say that I had no knowledge of them. In the ordinary way they were not for sale on the open stock market. It is this which makes it almost impossible, to determine to what degree Taranaki investors are affected.” -

Of the class of investor liable to buy debentures of the nature by direct negotiation most New Plymouth business men interviewed expressed the opinion that the capital for undertakings of the nature was mainly raised by subscription from small holders, possibly making only one or two investments from superannuation or money that had been saved for a special purpose or against retirement As the total sum involved in the transactions of the companies was very considerable this would logically indicate a large number ,of investors. The fact that the debentures had been offered for sale in India was regarded with interest a broker commenting that New Zealand investments were popular there with men retiring from the civil service, army and commercial houses.