SUPREME COURT.

Timaru Herald, Volume LVII, Issue 6069, 1 October 1894, Page 3

SUPREME COURT.

(BT THWJGBAPH.) CHRIBTOHUBCH, Bbptbmbee 29. At tbe Suprame Court yesterday, application was made for an order removing B Hale from tba position of liquidator of tbe Mercantile Finance and Agency Company. Mr Fischer said that the application woe made on bahalf of the holders of 3070 share?, out of 10,750 in the company. The liquidator had been one of the promoters and direotori of the oompany, and bit intimate connection with his fellow-promotera and directors of the old oompany made ib extremely inadvisable that he should continue in office, seeing that proceedings were pending in which they were deeply interested The statements of the petition were to the effeofc (hat at the time of the formation of the now oompany the old oompany had a reserve fund of £1229 16i 2d, wbioh had no existence except on paper. Some of the directors of the new company) of whom tbe liquidator Hale was one, )>aid over to themselves, as directors of the old company, tbe sum of £1229 16s 2d on account of that reserve, Tbe direotors took over the wLole of tbe deb's of the old company, amounting to £37.908 at their face value, without writing them down at all. In the report by Hale and Eussell ib was stated that on March 3 1st, 1893, the total logs on account of the securities taken over from tbe eld oompany had been £1425, yet in May, 1891, Bussell admitted that the losses on that account had been £3602. It was also asserted that the direotors of tbe old oompany had paid dividendi out of capital, and that misrepresentations had been made in the prospectus to the effect that the vendor company had done a profitable business, and bad paid dividends of the rate of 20 per cent after providing for bad and doubtful debts and after carrying forward £1229. Yet witbin two years afterwards the oompany broke up with a lost of £25,000. All these matters certainly demanded investigation, and in all of them Halo was interested. , Mr Stringer, who appeared to oppoce, said that the oaee was simply a fishing expedition on behalf of oertain individual shareholders, sod not for the benefit of the oompany. After argument, Mr Justice Denniston said that there teemed to be grounds for investigation, especially as to tbe alleged payment by the direotnri to themselves of £1229, tnd he would adjourn the case in order to allow tbo other side to file affidavits in reply to that of the petitioner!,