APPOINTMENT OF DIRECTORS

Press, Volume LXXI, Issue 21411, 1 March 1935, Page 18

APPOINTMENT OF DIRECTORS

.. QUESTION AS TO STATE NOMINEES MR R. A. WRIGHT MENTIONS A RUMOUR [From Our Parliamentary Reporter.] WELLINGTON, February 28. ""who will be the Government nominees for the board of directors of the Mortgage Corporation," asked Mr R. A. Wright (Ind., Wellington Suburbs) during the debate on the Mortgage Corporation Bill in the House of Representatives to-night. "It is common talk that one man, representing a very large business concern, and who was deeply involved in the exchange ramp, is to be one of the directors," he added. "I will not mention his name as that would not be fair to him."

The Prime Minister: Is he a good man? Mr Wright: I am quite satisfied that the Government and the Minister know whom they are going to appoint. Tney would not bring down this bill unless they knew. I think the Minister might easily give the House some indication of the men he has in mind. That might contradict the rumour concerning this man, who is very much interested in a company which has a great many mortgages over farm properties. Mr Wright said he hoped that this rumour was not true, because an interested man could not hope to act fairly. Even if lie did, the public would not give him credit for it. Mr Wright moved an amendment to the bill, with the object of excluding from the directorate any person directly or indirectly concerned in the business of a stock and station agency. His motion was criticised on the ground that it did not go far enough, although it might be sound in principle. Mr W. J. Poison (C„ Stratford) objected to discrimination against stock and station agents, who were only one section of the lenders. He referred to to-night's earlier statement, and said that the man in question was regarded as particularly fair and capable. He stood high in the estimation of farmers, and his appointment would not be an unpopular one. The amendment was defeated by 31 votes to 20. Mr Poison moved that the three shareholders' directors provided for in the bill, should be replaced by three directors representing the borrowers, and this amendment was also lost.

ASSOCIATE DIRECTORS GOVERNMENT'S PItOi'OSEI) AMENDMENTS [From Our Parliamentary Reporter.] WELLINGTON, February 28. Provision for the appointment of associate directors of the Mortgage Corporation is the most important amendment in a series circulated by the Government when the Mortgage Corporation of New Zealand Bill was being considered in committee to-day. A new clause states that the board of management may from time to time, as it thinks fit, define districts within New Zealand, and may appoint for any such district, one or more suitable persons to be associate directors to the corporation. The functions of the associate directors shall be to advise the board on any matters submitted to them by the board, either in relation to the general policy of the board or in respect of any matters particularly affecting the business of the corporation within the district.

Another amendment relates to the clause which states that the amount borrowed by the corporation and for the time being outstanding shall not exceed 15 times the sum of the subscribed capital and the amount to credit of the general reserve fund. The amendment adds after the word "outstanding" the words "including the amount of stock issued by the corporation pursuant to section 38." This relates to stock issued to the Crown in consideration of mortgages transferred to the corporation. A further provision permits any moneys available for investment by building societies to be invested in securities issued by the corporation. The method of repaying loans in securities of the corporation is limited by another amendment. In its original form, the pertinent clause stated that payment should be made in securities bearing interest at a rate not less than the rale of interest payable on the securities last issued before the date of the mortgage. The amendment provides that payment should be made in securities "of the last issue made to the public" before the date of mortgage. In the case of mortgages transferred to the corporation from the Crown, it was originally provided that payment should be made in securities bearing interest at the rate payable

on the first issue of securities by the corporation. A similar amendment provides for payment in such cases in securities of the first issue. INCREASE IN SHARE CAPITAL PURCHASING POWERS OF STATE [From Our Parliamentary Reporter.) WELLINGTON, February 28. An asurance that he would consider allowing the State to buy into any increase in the share capital of the Mortgage Corporation was given by the Minister for Finance (the Rt. Hon. J. G. Coates) when the bill was before the House of Representatives tonight. The bill provides that, subject to the approval of the Minister, the capital of the corporation may be increased by resolution of a general meeting of shareholders. Mr W. A. Veitch (Ind., Wanganui) sought to amend this by adding the words "but such resolution shall not take effect unless and until it has been confirmed by resolution of the House of Representatives." Mr Veitch declared that the corporation should not be empowered to increase its capital until the matter had had the full consideration of Parliament. Mr Walter Nash (Lab., Hutt) asked whether the Government would have the opportunity to take up any additional shares issued by the corporation. Mr Coates stated that the Government could take up any part of the shares. He added that the shareholders could not increase the capital of the corporation of their own will. Mr W. Nash: But they can, with the consent of the Minister. Mr Coates: That is so. Mr Veitch: I submit that the State has not the power to take up any of the additional shares at any time. Mr Coates said he thought Mr Veitch was right. It would be necessary to have full authority to take up any of the additional shares, and he was prepared to consider giving the State power to purchase any quantity of those shares that it might deem fit. Mr Veitch's amendment was defeated by 31 votes to 25. Mr Coates announced that provision would be drafted to allow the State to purchase further share capital, and the clause was deferred.