39

I.—4a

resolution to liquidate has been confirmed in connection with the Ngahere Company; and with regard to the Lees Ferry Company the meeting for confirmation of the resolution is to be held to-day. 289. Is the Tucker Flat Company in liquidation?— No. 290. Has any resolution been passed with regard to liquidation ?—-Some of us are in hope of saving it by amalgamation with the Hokitika Extended Company. 291. I want to know what the position of the vendors' shares is in the Golden Grey Company ; have they been allotted ? —No. 292. Have they been allotted in the Ngahere Company ? —No. 293. In the Lees Ferry Company ?—Yes. 294. In the W icklow Company ?—No; I understand that in each case agreements were adopted to allot the shares. 295. But they have not been allotted?— No. 296. What is the position with regard to the subscribing and vendors' shares in these companies that are in liquidation?—l am of opinion, and always have been, that the loss will have to be divided between both vendors and subscribers. The subscribers will have to make up to the vendors a certain amount. 297. But in these companies where the vendors' shares have not been allotted what is the position ? —I take it the vendor has a claim against the company or the liquidator to compel allotment of the shares; he can come on the estate of the company. 298. What will happen with the vendors' shares—who will they be allotted to ?—I take it that the companies are responsible to Cook, and he to the West Coast vendors. 299. But what will become of the vendors' shares ?—When the liquidator calls for claims against the company I presume the vendors will send in their claims. At all events, they have the legal right to do so. 300. Had the companies any right to go into liquidation without allotting the vendors' shares ? —Certainly not. The Golden Grey Company went into liquidation illegally. I will read the resolution deciding to go into liquidation: "It has been proved to the satisfaction of this meeting that the company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same, and accordingly the company be wound up voluntarily ; and that Sidney Thomas Mirams, of Dunedin, be and is hereby appointed liquidator for the purpose of such wind-ing-up." It was not proved that the company could not carry on. As a matter of fact, only the application- and allotment-money was called up. It is true it might have cost more for a satisfactory dredge than the capital of the company would amount to, but it is by no means certain. In fact, to my knowledge, a dredge that could work that claim could be paid for out of the capital of the company. 301. You say that the company was wound up illegally, or was proposed to be ; wherein was the illegality ?—ln the statement that the company could not, by reason of its liabilities, carry on —in the wording of the resolution. 302. That is not a question of legality, is it ? —I am so advised by a solicitor ;of course, Ido not pretend to be a lawyer myself. 303. How many of the companies are being wound up illegally, in your opinion ?—This is the only one in connection with which the resolution is put in that way. 304. Can you tell me who the vendors are—who will hold the vendors' shares?— Mr. Cook should' send in his list as to how the vendors' shares are to be allotted. I understand that with regard to the Golden Grey Company that had been done, and the vendors' documents to the company were lying at the bank in Dunedin waiting to be handed over in return for the vendors' shares which would be allotted. 305. Can you tell me, then, in these cases where the vendors' shares have not been allotted, whether the subscribing shareholders will have to pay up the whole of their calls on their shares in order to equalise them with the vendors' shares, though those vendors' shares have not been allotted ? —In my opinion, yes. 306. You say that no vendors' shares have been allotted in the Golden Grey Company ?—That is so. 307.. Then, there are no vendors to go to to ask them to agree to forego their rights, are there ?—Yes, under the agreement with the company. 308. But they have not got vendors' shares ? —The company have agreed to allot those shares. 309. That is not the point; the vendors have not got the vendors' shares ?—No. 810. And there are none on the register?— None. 311. Therefore there are no vendors on the register to go to to ask them to agree to forego their rights, and, if there are none on the register to go to, what is the position ?—Mr. Cook is the vendor to the company, and he is the person who has to write to the other vendors. 312. I want to know the legal position ?—My idea is that the liquidator, before he can liquidate, must call for claims against the company, and it is for the one vendor only that the company knows —the man who has agreed to sell the claim—to put in his claim. 313. Do you know whether it is illegal or legal to have agreed to have wound up the Golden Grey Company without allotting the vendors' shares ?—I think it is legal in that respect, but very inadvisable, because in winding up the company in that way the shareholders must know that they are responsible to the persons to whom they agreed to allot these shares. 314. Is there any agreement to allot the shares ?—I understand there is. 315. In all these companies ?—Yes. 316. Then, why have they not been allotted?—As soon as I got on the board I at once tried to rectify this false position that the companies were in, but I met with opposition, and what I