COMPANY PROMOTION

Dominion, Volume 10, Issue 3070, 4 May 1917, Page 5

COMPANY PROMOTION

SUPERVISION IN AUSTRALIA. Tile following statement regarding company promotion supervision by the Commonwealth Government was issued by the Federal Prime Minister (Mr. Hughes) last week:— It is officially stated that the Fedferal Treasurer's heavy task of raising ,%he money necessary for the conduct of the war has been very considerably assisted by the policy of supervising private company promotion and the raising of capital inaugurated by the Hughes Government. It was in January, 1916, that the regulations :,were gazetted under the War Precautions Act, requiring that ; the consent of the Commonwealth Treasurer should be obtained (a) to the registration of any company, firm, club, or association, and (b) to tho increase of nominal capital, or the increase of the issued capital; of any company, previously established or new, or the calling up of money on issued shares.

Figures have been prepared showing the result of'ten operations of the regulations. Those show that about 86 per cent, of the applications made were granted, 6 por cent., were refused, and 8 per cent, were not proceeded with by the applicant. The complete result is not, however, disclosed by these figures. It' is contended that many companies which would have been floated on the market but for the restrictions, are- not Submitted by tho promoters for the reason that they would not care to face the Government criticism. The intensions of tho regulations were mainly to provide against t/ho speculative element in the formation of new companios and to ensure as far as practicable that capital raised should bo for tho extension of manufacturing and producing concerns in tho Commonwealth.

Company promoting, except for honaflde objects, has been restricted, and tho ordinary investors' interests are, to Some considerable oxtent, safeguarded by tho refusal of sanction to any companies of a "wild cat" and speculative element. Particular attention lias also been given to the nationality of 'tho shareholders of all companies requiring extensions of capital. Tho registration of firms is also subject to supervision, the main object boingr to prevent persons of alien origin trading under names calculated to hide their identity. Early in the present year a further regulation was instituted to prevent capital being expended in •amusement propositions without the consent of the Fedora! Treasurer. It in desired to, as far as possible, limit the expenditure on amusement propositions, as it is considered that in the present national crisis money would be betti-r expended in producing or manufacturing ventures.