I.—4a

18

22. Mr. Colvin.] Who draws it ?—While matters are in abeyance we are not drawing directors' fees at all. The general meeting can, if it chooses, vote us fees when we explain the work we are doing. 23. Mr. Herries.] But no fees have been voted since you have been director? —None paid. 24. Have secretarial fees been voted? —Certainly. 25. Who drew those fees ? —The secretary. 26. Were you aware that they were paid into Cook and Gray's account ? —They were not in my time. They were paid to Mr. Hoisted. Mr. Hoisted has purchased the Dunedin branch of Messrs. Cook and Gray's business, and the alteration has made no difference whatever in his position as secretary to the company. 27. He draws the fees now himself, and formerly he paid them into Cook and Gray's account ?—He may have done so ; I presume he did. 28. Have you got the articles of association of the company there? —Yes. 29. You are perfectly acquainted with all those articles of association —Yes. 30. Is the deed of sale from Cook to the company there ? —Yes. 31. I would call your attention to clause 5 : do you consider that is a proper clause to be embodied in any articles of association ? —lt is frequently done , it depends on the bargain made between the company and the vendor. 32. As a director, do you not think that that contradicts the clause in Table A of the Companies Act of 1882 —viz., clause 57 : " The office of director shall be vacated —If he holds any other office or place of profit under the company ; if he becomes bankrupt or insolvent; if he is concerned in or participates in the profits of any contract with the company ; if he participates in the profits of any work done for the company. But the above rules shall be subject to the following exceptions : that no director shall vacate his office by reason of his being a member of any company which has entered into contracts with or done any work for the company of which he is a director; nevertheless he shall not vote in respect of such contract or work, and, if he does so vote, his vote shall not be counted " ?—Well, companies have power to alter Table A to meet their requirements, and, as long as it is not ultra vires to the Act itself, it is generally done. Table A, as adopted here, is practically copied from the English Act, and as long as the company thinks proper to amend Table A they can do so in any respect, provided that it does not interfere with the main Act. I might say that I was not a director until within the last three or four months, and lam not responsible for the articles of association. They were drawn by Mr. Allan Holmes, of Dunedin, who I believe is thoroughly competent; and I know that the articles of association of many other companies, in addition to Cook and Gray's, have the same clause. 33. But do you not think that the two contradict each other ?—Yes ; but Mr. Cook was not a director at the time that he made this bargain with the company. He became a director by virtue of his subscribing shares, at the request of the shareholders in general meeting. 34. But he was a director at the time that he drew the office-rent? —Yes, that may be ; but there is a saving clause :—Table A, clause 57 : "But the above rules shall be subject to the following exceptions : that no director shall vacate his office by reason of his being a member of any company which has entered into contracts with or done any work for the company of which he is a director ; nevertheless he shall not vote in respect of such contract or work, and, if he does so vote, his vote shall not be counted." That exception, I consider, would cover Mr. Cook's position in the matter. 35. The Chairman.] It would cover his receiving rent ?—He had not received rent; he got paid for work done by his manager; practically that is what it comes to. , 36. Mr. Herries.] Are you still a director?— Yes. 37. What is the reason why the company has not been liquidated? —We know the claim is a good claim. It has been tested by two experts, and Mr. Leijon, who is a very successful mining man, visited the claim, and reported favourably on it. An effort is being made on the part of some shareholders to get out of their liability in regard to the claim. There is a slump on, and shareholders have got frightened, and are not particular as to what means they adopt to get out of their responsibility. 38. Is it the intention of the company to put on a dredge ?—We are now in treaty with another company, who have a dredge, and are not satisfied w T ith their claim, to amalgamate. 39. How much protection have you got ? —We have been prospecting, and I think we have now some seven or eight months before we have to commence to build the dredge. 40. What protection did you get ?—We paid the rent the other day —a year's rent —so we must have eleven months, not seven or eight months. 41. Have you got men working there now?— There are two men, I think, working on the claim, but not for the company. 42. Whom are they working for? —They are working on their own account —working for the gold they are getting. 43. Mr. Colvin.] Are you still in Mr. Cook's employ ? —Yes, on and off; I am practically on my own account. I now work for Mr. Cook casually. 44. Do you consider it right that Mr. Cook should be the vendor to the company, act as secretary, and act as director?—He never acted as secretary; Mr. Hoisted was appointed secretary. 45. But was not Mr. Cook responsible for Mr. Hoisted?— But Cook's name does not appear as secretary, and Mr. Cook was not responsible to the company for Mr. Hoisted's actions as secretary to the company. 46. That is only quibbling : is not Mr. Hoisted manager for Cook and Gray?—No, not now; he was at one time. 47. Did Cook and Gray not get the secretarial allowance—the secretarial salary? —I believe it was paid into their account.