A FINANCIAL CAUSE CELEBRE.

Ashburton Guardian, Volume V, Issue 1062, 28 January 1884, Page 2

A FINANCIAL CAUSE CELEBRE.

A financial cause celebre is now being heard in the Court of Queen’s Bench, London. The plaintiff is Mr Kenneth Bellains, manager of the Stock and Share Auction. The defendants are Mr Tucker,-a lawyer; Mr Hey man, a professional promoter of companies, and Mr Henley, an engineer. The history of the matter began in August, 1878, when the defendant Healey took an English patent for obtaining a particular product from the fruit seed of dates. The next step was to sell the rights under the patent to Talbot Heyman, son ot one of the defendants, in consideration of one penny per pound royalty and L 30,000 in cash on sharesfully paid up in the company started by Talbot Heyman, called the Date Coffee Company, Limited, with a nominal capital of Ljo.ooo in L 5 shares. The ' prospectus was issued, the defendant Heyman being, chairman, and Tucker being solicitor to the company. It was part of their scheme that the shares should not be put in the market, but chiefly held by the three defendants, and out of 6,800 shares allotted altogether 6,400 were appropriated to the defendants. Flaming announcements were then published in various newspapers upon the merit of the date proV duct,- which' was ftated to possess w several distinct advantages over ordinary coffee. When under the powers of the company subsidiary companies were Termed for , the purpose of buying at extravagant prices the right to use the patent in foreign countries. Amongst these was the French Date Coffee , Company; and in the prospectus —which was one inducement he}d put to the plaintiff—it was stated :— ** From the success attending the company formed in England, the directors feel justified in stating their confident belief that the' profits of the company will be more than sufficient to pay dividends of fifty per cent on the nominal capital. This will exceed those of the company in England, . . which, having only, been formed about , eleven months, has entered into a contract which will yield a sum equal to the whole paid up capital of L 34,000.” The plaintiff claims that there is no justification for this statement, the only means by which the parent company made a- profit being by the sale of its patent rights to French and other foreign companies by which they got Laso.ooo, and a further sum of Lso.ooo obtained by the capitalisation of their royalty. He alleges that the sums represented the plunder which found its way intp the pockets of the defendants. The parent company was soon in liquidation. The public interest in the case increases owing to the direction of the Judge, who has ordered that cups of date coffee be made in court and tasted by the jury. ■ ■ .