SCOPE FOR RESEARCH

Waikato Times, Volume 119, Issue 19914, 17 June 1936, Page 11

SCOPE FOR RESEARCH

QUESTION or CONTROL. ‘ COMPANY HECONBTRUOTIONI 1 Various points raised by Mr W.‘ Bertram Nelson in a lecture to mem—‘ bers of the Bradford Society of ln-‘ corporate-cl Accountants may have some 1 application to rcrtnin developments in‘ New Zealand, He mentioned that: the term "reconstruction" in relation to companies strictly referred to the! sale of an undertaking of an existing company to a new company. How—3 ever. he quoted The authority of Lord \Vrenhm‘r to the effect that the word “reconstruction" could he applied to. all cases where “substantially the some people carry on the same business in some altered form." ‘ “May [ indicate. certain directions in which it has been suggested that a reform of company reconstruction pro—cedure is desirable?" said Mr Nelson in concluding his address. -"It has been said with. I think, some degree of truth that a reconstruction leaves the company still under the control of those very people who brought it to its present plight. and that, there is no independent investigation of the real cause of the. disaster which may well be bad management. It- is, therefore. suggested that the directors are often not qualified to draw up a scheme. that the shareholdcrs are not given sufficient information to enable them to judge as to ‘the desirability of the scheme propounded. and that there should, therefore. be power to require a. report by an independent ac—countant, and advisory committee with a view to the wholesale change in the methods of control of the business. it proved desirable. Gluse of comm-int. “Another cause of complaint is the present abuse of proxy forms, which are sent out at the expense of the company to enable members to vote favourably (but not,otherwise) on the scheme submitted. it is increasingly thought that there should be power to give. a negative vote. It is also said that the position of preference shareholders has been much abused in the past and this aspect certainly requires attention in future schemes. ”On the technical side there is. I believe, a considerable field for research on those reconstruction schemes in the directions which I have indicated, such as the ultimate effect of the schemes, the best methods Of capitalisation, and the like. The i work will. I think, he one of the sub—jects to be considered by the relsearch committee which has recently been set. up by the Society of Incor—lporated Accountants, and I hope that eventually the subject will become less difficult and less obscure.“