PAYMENT OF DIVIDENDS.

Waikato Times, Volume 109, Issue 18256, 18 February 1931, Page 8

PAYMENT OF DIVIDENDS.

EXPLANATION BY BANK. WELLINGTON, Tuesday. In connection with the cablegram addressed by the Christchurch Stock Exchange to the chairman of directors of the Bank of New South Wa'es, the resident inspector in New Zealand has received the following cablegram from his general -manager:— > “Regarding the protest concerning the payment of dividends in Australian currency, the rules of law governing payment of dividends and repayments of deposits are entirely different. Deposits are received in legal lender, and can only be repaid in the legal tender of the country ill which the deposits are held. Questions of the currencies of other countries and external rates of exchange therefore do not affect either the receipt or payment of deposits or interest on deposits. “The rules of law with regard to the. payment of dividends to shareholders are entirely different. A shareholder knowingly buys an interest in the capital of the country. He knows where its main business is conductcfl, and where its headquarters are situated. The general rule of law affecting dividends is that no one shareholder is entitled to receive from a company, per unit of his holding, any more than any other shareholder. This rule governs the position, unless any special provision appears in the company’s constitution. “Owing to ithe marked variations from par of the Australian and New Zealand rates of exchange on London and each other, it was impossible longer to disregard the exchange position and continue to pay dividends on a par basis as formerly. The bank therefore took counsel's opinion, both in London and in Australia, and hold the independent opinions of five learned counsel that the hank Is under an obligation to pay its dividends In Australian currency.”