PROMOTION OF MINING COMPANIES.

Timaru Herald, Volume LXXV, Issue 11593, 31 October 1901, Page 3

PROMOTION OF MINING COMPANIES.

"ACTS OF COMMERCIAL IMMORALITY." Per Press Association. WELLINGTON, October 30. The report of the joint Goldfields and Mines Committee on the petition of Mr Herbert E. Easton. of Dunedin. was laid on the table of the House to-day.

The petitioner asked that legislation be passed in order to prevent what he alleged ■were acts of commercial immorality in mining companies known as "The Cook Group." The committee, in its report, sramnarieses the various charges made, and fays: — " Seme have not bees proved, and. others are matters that should be dealt with by the Law Courts." In regard to certain charges made in connection with the flotation of the Golden Grey Company, the committee asjs:—" Th? p2jt of this charge

which concerns it is ilie formation of a company merely for speculative purposes on the share market. This is against public policy and is purely a species of gambling, and should be stopped by legislation. All the parties knowingly entering into such a transaction are " participes criminis." The committee thinks that legislation is necessary " to prevent the occurrence of such a case as that alleged to have taken place." In regard to the formation of secret rings for speculative purposes by promoters and directors, the committee "suggests that the law should be altered to the effect that where any money for application, allotment or calls is due i upon shares, then the same should be noted on the transfer of these shares before it is completed. The committee recommends that proceedings should be instituted by the Crown to test the legality of certain companies which had been formed by less than seven shareholders, as required by the Companies Act. The law should also be amended to prevent the "safety clauses of the Act being overridden and to ensure that all shareholders should be treated alike when calls are sued for." In regard to the charge of " shareholders voting and directors acting when their calls were unpaid," the committee found that Mr Cook, acting as a director for several companies, had actually passed to himself large sums for brokerage ! while he was still owing large sums for alj lotment charges. The committee says : ' ; The law certainly requires amending in the direction of depriving a shareholder of the right to vote or act as a director until he has paid his allotment money." The committee found that Mr Cook had paid for his and Mrs Cook's shares in the seven companies whose books were put in evidence the sum of £2140, but Messrs Cook and Gray received £lß4l back from, the companies for brokerage, secretary's salary and directors 1 fees. The committee recommends "that the law be altered on the lines it has indicated, and so provide that all mining companies shall Tie registered under the Mining Companies Act.

The House, on the Premier's motion, decided that the Teport of the committee should "be published in " Hansard."