SHARE TRANSACTIONS

Dominion, Volume 37, Issue 21, 20 October 1943, Page 6

SHARE TRANSACTIONS

Comment By Judge On Legal Safeguards (By 'Telegraph.—l’ress Association.! DUNEDIN, October 19. “We are well aware of the possibilities of manipulation by dishonest or unscrupulous persons in control of a number of interlocking or subsidiary companies,” said Mr. Justice Kennedy in his charge to the grand jury in the Supreme Court today. They had had some experience in this country of difficulties due to abuse of the power of control of subsidary companies, he added, and the legislature itself had intervened by passing the Companies (Special Liquidations) Act, 1934, which provided for the winding up of some 13 companies. His Honour added ithat at the present time in. England a strong committee presided over by Mr. ■Justice Cohen, of the Chancery Division, was considering what amendments were desirable, and reviewing the requirements of the law and the safeguards afforded to investors and the public interest. There were, as they knew, always a number of inexperienced investors who ■might be hustled by strong salesmanship ‘and personal pressure from one company [investment to another, and manipulated like mere pawns; A favourite technique •was to get them to realize on sound investments and to change over to shares "pushed” by the salesman, and even to turn their interest or dividends into further shares. “It may well be that some further provision is required for the protection of inexperienced people.” said his Honour, “and no doubt such cases as I have mentioned will receive special consideration in England, and if some remedy which does not unduly hamper legitimate activity can be discovered, it will be adopted there and copied here.”