DESIRABILITY OF BILL

Taranaki Daily News, 3 November 1934, Page 9

DESIRABILITY OF BILL

MR. COATES’ EXPLANATION SPECIFIC REASONS GIVEN SAVING OF INVESTMENTS The Rt. Hon. J. G. Coates, Minister of Fjnance, in explanation of the measure, said communication was held with the Government of New South Wales regarding the desirability of appointing a receiver and manager, and action had probably already been taken in New South Wales. Many people had invested money in good faith, and the object of the Bill was to appoint a receiver and manager in New Zealand, the object being to watch the interests of debenture-hold-ers in New Zealand. It did not take a great deal of imagination to see that it would be possible at very short notice to transfer any of the securities held in New Zealand to another country unless action was taken which would prevent it until the whole position was cleared up. Mr. Coates said that events and the information gained in the intervening period of 12 weeks, had .revealed six things which justified, in his opinion, * this present legislation. were that: — (1) The interim report d the New ; Zealand Company Commission, with its recommendation that there was a case for inquiry, was fully vindicated. (2) It had been proved that the books, records, securities and other properties of the New Zealand companies, almost wholly financed by money of New Zealand debenture-holders, had been removed to New South Wales. (3) It had been made clear that it was the intention of the directors and managers of these companies if they were left in control to administer the affairs of those companies permanently from Australia. (4) The position created by the conflicting rights and claims of these directors and managers on one hand and ~ the New Zealand debenture-holders on the other hand had been a difficult one that would probably require legislation in New Zealand and in Australia to provide an equitable solution. (5) There was a danger that after the determination pf the control suggested by the New South Wales Royal Commission and before the filing of the reports of New Zealand inspectors in the Supreme Court of New Zealand the affairs and properties of the companies in question would, as a matter of ordinary legal right, pass back to the unfettered control of those persons whose transactions had been the subject of the inquiries referred to. (6) In view of the evidence tendered before the Royal Commission at Sydney it was undesirable in the interests of New Zealand debenture-holders that

the control of the companies in question should so pass back to the present directors and managers before the Supreme Court had had an opportunity to consider the reports of the inspectors appointed under the recent legislation and any application to the court that might be based on those reports.