WAITAKI FREEZING CO.

Waimate Daily Advertiser, Volume XXIV, 30 December 1926, Page 6

WAITAKI FREEZING CO.

SHAREHOLDERS VOTE CONFIDENCE IN DIRECTORS. YESTERDAY’S MEETING AT OAMARU. “That this meeting has every confidence in the directors, and in the arrangements made for the forthcoming season” was the resolution passed at an extraordinary general meeting of shareholders of the Waitaki Farmers’ Freezing Company, which was held at Oamaru yesterday. There was an attendance of about eighty at the meeting, which was called as the result of a resolution passed at a meeting of Waimate shareholders held recently at Waimate, and was arranged for the purpose of considering suggestions from the Waimate shareholders. The advertisement calling the meeting contained Article 73 of the Articles of Association which debarred any unfinancial shareholder from taking part in any general meeting of shareholders and as a result of this intimation those present comprised mostly North Otago shareholders, there being very few present from the Canterbury side of the Waitaki River.

The acting-chairman of directors (Mr R. Milligan) presided over the meeting, the chairman being absent owing to illness. After the advertisement calling the meeting had been read by the secretary (Mr J. I. McEwan), Mr Milligan detailed what had transpired at the meetings held in Waimate, which had led to the general meeting being called for that day. He read the resolution the directors had received as the outcome of the second meeting held in Waimate, copies of which had been received from both Messrs W. Stewart and J. Meehan. The request of the resolution had been acceded to and hoth those gentlemen had received intimation that the meeting was called for. December 29th. Explaining the inclusion of Article 73 in the advertisement, Mr Milligan said that it was usual to attach it to a notice of a meeting, and the same reference had been made in regard to the notices in eonection with the annual meeting. That was part of the Articles of Association. Mr George Barclay had telephoned to him asking if it was the intention of the directors to enforce Article 73 and the speaker had said “No.” Continuing, Mr Milligan said he did not at that stage intend to deal with the position of the company but would like to make one important statement: The directors were under an obligation to pay portion of the cost of the works every year, £lO,OOO a year. The works had cost £192,000, and they had paid off £60.000, leaving a balance of £132,000 still owing. They had been unable to pay the instalment due in January of this year, and had asked the New Zealand Refrigerating Company to allow it to stand over. It was very necessary that the Company should incur no trading losses at all this year, continued the chairman, and the directors were very much alive to the position. They were now able to give prompt payment and the very top price for the meat sent in and he urged shareholders to give every assistance by sending their stock to Pukeuri. The directors knew that something required to be done to put the works on a sound financial basis, and they must be given credit for knowing when to call the shareholders together to place before them proposals to 'ensure a continuation of the works in the interests of the farmers. He was sorry the directors had not been trusted, by certain corespondents who had written to the newspapers. Those letters had done a great real of harm as they had suggested that the company was unable to make its payments promptly. Mr Milligan as sured them that such was not the case and lent emphasis to his statement by disclosing to the meeting the contents of a letter received from the company’s bankers. He then invited Waimate shareholders to lay their views before the meeting, and said all questions would be gladly answered. Mr R. P. Henry (Tawaf) said he was the mover of the resolution passed at Waimate. which asked the dir eetors to call the meeting. The advertisement that had appeared in the papers stating that unfinancial share holders woitld not be allowed to take part in the meeting had squashed the object the Waimate shareholders had in asking for the meeting. He considered the directors had made a

great misatke in not getting all the shareholders together for the purpose of discussing the situation. The meeting was requested only for the purpose of a discussion. He said he was not speaking for himself as all his calls were paid up to date; but he would have liked the unfinancial shareholders to have been present when they could have expressed their views. Many shareholders had thought the purchase price of the works was too high, but they would have to make the best of that now. Many farmers were not in a good position to-day, and the mercantile firms thought it unwise to pay those farmers’ calls, and would not pay them. The advertisement debarred those farmers from taking part in the meeting. He thought something should be done for them. If they had been present at the meeting they might have had a discussion, and have left the meeting contented. Personally, he was in favour of the Pukeuri works, and intended to do all he could to support them. If the works were put on a proper footing he would be prepared to take up another £5OO worth of shares, and he thought others would act similarly. The chairman asked if there were any more speakers, and a voice asked: “Where is Mr Corrigan 1 ?” Mr M. J. Corrigan (Waimate) said the chairman was labouring under a misapprehension when he said the newspaper correspondents doubted that the Company was unable to make prompt payments.

The chairman: “That is the effect of your letter.” Continuing, Mr Corrigan asked if the financial arrangements were made with the Bank, or with the New Zealand Refrigerating Company. That was the burning question. They recognised that they were not able to carry on, and that it was a matter of giving up the works and snaking fresh arrangements. The people over the river state that this was the opportune time to approach the New Zealand Refrigerating Company to write down the price of the works. If that was done they could ask for a new capital and say: “These are our works.” They could not do that at present. He considered the directors had shown incapability in keeping a manager who had been incapable. He asked how many unfinancial shareholders there were in the Company. He urged that

the directors approach the New Zea land Refrigerating Company and get them to write down the price. “I have no grievance against the works,” concluded Mr Corrigan, “and am just as much in favour of them now as I was when I held the first meeting at Glenavy.” (Applause) Mr W. Stewart (Waimate) said that what led to this meeting was the fact that the Waimate shareholders had heard certain statements. Referring to his letter in the press, Mr Stewart said the letter had not been written with malice, and he was prepared to back up anything he said. More damage had been done by the indiscriminate issue of summonses against shareholders who were unable to pay their calls, without' first ascertaining the position of those shareholders. Mr Stewart referred to the question of the sale of the works, but at the request of the chairman agreed to leave that matter alone. Continuing, Mr Stewart said that the Waimate shareholders were animated with a desire to possess a co-operat-ive farmers’ freezing works. He referred to the loss of £lB,OOO the company had sustained which would have been added to had the New Zea land Refrigerating Company not sac rificed the interest. A great number of the unfinancial sharehelders would never be able to pay their calls, continued Mr Stewart. Shareholders had thought the company was in a precarious position, and one of the grievances was that the negotiations with the Refrigerating Company had not been placed before the shareholders for discussion at the annual meeting. At the close of the conference between the Waimate shareholders and the directors there had been a sharp difference of opinion. The directors agreed to a writing down of the cost of the works, but not to an immediate writ ing down. The directors’ argument was that they had entered into cettain arrangements with the New Zea land Refrigerating Company. The Waimate shareholders asked why should the question of writing down the cost of the works enter into the matter of the business arrangement already made. That was the position. They were heartily in accord with making the company a success. It was not right that unfinancial shareholders should be debarred from taking part in a meeting when

they were responsible for their shares. Some steps should be taken to see whether unfinancial shareholders can be released from the circumstances in which they are placed, or whether the powers of the company can be increased to meet these special cases.” The issuing of summonses against shareholders who were unable to pay only caused a feeling of irritation, and stock was not sent to the Pukeuri works.

Mr G. Barclay (Waimate) said at the Waimate meeting there was a feeling of dissatisfaction with the directors, not with what they had done—every speaker gave them credit for what they were doing under the circumstances, but there was a feeling that the directors had not been frank at the annual meeting. The directors must have known then that the shares had to be called up. Mr Milligan: The share capital in any case had to be called up quite independently of any arrangements made for this year’s operations. The directors did not withhold that purposely at the annual meeting—they took it for granted. As a matter of fact the capital should have been called up long ago. There was an overdraft which would not have existed if the share capital had been called up. Mr Barclay did not doubt that, but felt' it should have been made known at the annual meeting. He detailed the attitude he had taken up at the meetings in Waimate and he had suggested the round-table eon ference with the directors. Personally, he did not think the directors should be asked to depart from what they were doing, but at the end of the year the whole position should be put fairly and clearly before the shareholders. Referring to the notice calling the meeting, Mr Barclay said nothing had been done to hurt the company more than the appearance of that notice. The directors were in the best position to know how to carry on the works for this year, and it would not do to upset the: present arrangements. The shareholders must have confidence in the directors before the Pukeuri works could carry on successfully, and it was only by a round-table conference of directors and shareholders, both financial and unflnancial, that they could come to a proper understanding.

Mr Henry asked if the directors would call a meeting of financial and unfinancial shareholders. He thought it would do a great deal of good. The chairman intimated that if the meeting desired another one called the directors would consider the matter, but he asked what good would such meetings do. He had advised Mr Barclay that no shareholder would be barred from attending the meeting. He did not think any good purpose would be served by such a meeting. Mr Henry asked whether any shareholders had been sued while they had lambs in the works. Mr Milligan: “I could not say.” Mr Henry: “That was very disastrous to the company.” Mr Milligan said the call capital was needed. The directors were very much concerned about the amount of the unpaid calls, and sent out notices from time to time. The unpaid calls were crippling the company. He had yet to learn that a company could carry on without cap ital. A voice: “What about crippling the fanners?” Mr Milligan: “We are not crippling the farmers. This company gives far more time for its shares to be paid than any other company. We have had to get a». overdraft from the bank aganst the unpaid calls. Mr Corrigan: “Are you getting the money from the bank, or through the bank?” Mr Milligan: “The Refrigerating Company has agreed to pay for our stock. The directors of Waitaki Company had made a most excellent arrangement, and any farmer wishing to consign his meat home could do so. This company will not make . one penny trading loss this year, and farmers will get ths highest possible price for their meat.” Mr Henry said only two calls remained to be made. He asked how the directors would carry on when all calls were paid up. Mr Milligan: We have to make ar. rangements for overdraft against un paid share capital. Replying to Mr Stewart, the chairman said every case where a summons had been issued had been considered by the Board of Directors on its merits. Mr Stewart said he had explained his position, but was summonsed. Mr Milligan said there were 523 unfinancial shareholders, and 311 who were financial, but the call had only recently been made, and that was why a large number of calls had not been paid. Mr.J. Smillie: “Only about ten per cent of the shareholders present are financial.”

The chairman: “More thanti Mr Milligan asked for a resoM Mr Henry thought a resoh from such a small meeting cwK do nmeh good. A short exchange of words tween the chairman and Mr Bl followed concerning the notice tached to the advertisement, thel ter being ruled out of order andi ed to sit down. The chairman said that Mr 0 rigan was partly responsible fa inclusion of clause 73 in the arid of association. Mr Corrigan said the drawing of the articles was left in the ha of the company’s solicitors, ad did not know what was in then. Mr Milligan (with a smile): am surprised at you passing« articles and not knowing what 1 in them.” Mr Henry; “I say you spoiledt meeting by such notice in thel vertisement.” After two other shareholders« pressed their views Mr M® l moved, and Mr J. Frew second the motion appearing above. Mr Davis (Central Otago) < pressed the opinion that the W in the newspapers had done a M harm and caused feelings of s’? ion. Unity was strength, ad was sure they could trust the W ors. The shareholders in to • trict were loyal and had every* fidence in the directors. The resolution was then put D meeting, and carried unaniffl’W Mr Milligan: “Now I hope !• will send along as many la®”, possible to the works so that** have a jolly good season. A shareholder: “What is off price?” Mr Milligan replied that i not been fixed yet but it made known as early as l’ oS!1 A Mr W. Stewart moved a vote of thanks to the chainin' 1 ' Mr Corrigan, in seconding tion, protested against tße ’ sistency of the directors in a 0 unfinancial shareholders to ter advertising that they w be permitted to do so.