Tightening Up Of Companies Act

Press, Volume CVI, Issue 31082, 10 June 1966, Page 3

Tightening Up Of Companies Act

(New Zealand Press Association) WELLINGTON, June 9. The Government intended shortly to introduce legislation tightening up the prospectus provisions of the Companies Act, the Minister of Justice, Mr Hanan, told Parliament today.

Mr Hanan said the new legislation would require the appointment of an approved trustee to see that the borrowing company kept its promises in so far as it was able.

He was answering a question by Mr M. A. Connelly (Opp., Riccarton), as to

whether he was satisfied with the financial stability of various companies which occasionally offered the public high rates of interest for unsecured deposits or to take up unsecured debentures.

Mr Hanan said that the principle of the Companies Act was that there should be full and fair disclosure—in other words that the investor should be given adequate facts through the prospectus and other documents to make up his own mind whether to risk his money. “Nevertheless it cannot be over-emphasised that in the last analysis each individual must decide for himself whether the venture is soundly based and whether the promise of high interest justifies the risk,” he said.

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