COMPANY MATTERS

Evening Post, Volume CXVII, Issue 22, 26 January 1934, Page 9

COMPANY MATTERS

FINANCIAL METHODS

SPECIAL COMMISSION

The duties of tho special commission which has been appointed to, investigate tho promotion, financial methods, and operations of certain companies in the Dominion were gazetted last evening. Mr. J. S. Barton, S.M., of AVellington, is the chairman of tho commission and the other members are Professor H. BeMaw, of Auckland, and Mr. F. E. Graham, of Christchurch.

The tribunal is described in the order of reference as " a commission to inquire into and report upon tendencies and developments apparent in the Dominion in relation to the promotion, financial methods, control, and operations of companies and other corporations which seek to raise capital and loan funds in the Dominion." It will inquire more particularly into ,the following matters: — "..■■■. (1) The methods of promotion and administration of such companies including their subsidiary companies and syndicates: ■ ■ Tho scheme of control of such companies and >the relative powers and right of promoters, subscribers of shares, and subscribers ] of debenture, bond,: or' security certificate issues: The -financial schemes of such companies with particular reference to the relative application of the companies' . and bondholders' property and-funds to (1) remuneration and. profits to promoters and subsidiary companies, (2) formation, working and administration expenses^ and (3) protection and furtherance of the interests of holders of long-term debentures, bonds, security certificates, and like instruments or securities: Whether the benefits which may be found at present to accrue to promoters or shareholders in bondissuing companies through the surrender or forfeiture of bonds should be applied and credited to bondholders' fun s ds in, the particular group or series of any. such bonds surrendered or forfeited, or otherwise: Whether the provisions of the Companies Act, 1933, relating to prospectuses' and; otherwise requiring disclosure or material contracts and transactions and prospective contracts and transactions are reasonably adequate to protect intending investors in shares, debentures, bonds, security ; certificates, and other liko instruments^ ■' ■ '"■ •-■ .' ■■'■,■ , (2) The financial structure of financial investment and, trust, companies, and as to whether any additional legislative provision should be made' to ■ afford" investors,1 ■;a ; greater > .measure of protection for their capital moneys , and other interests in such companies: The desirability of regulating in , the public interest the formation and operation of ( trust companies and investment companies dealing in. company shares, Government, local body, and other forms of security. (3) The operation of the present statute governing the constitution and registration, of stock exchanges in New , Zealand. . .:' . . V- ~ The commission will also report upon •generally what steps, if any, should be taken by way of modifying existing statute law and regulations thereunder having regard to the present and prospective welfare of. the investing public and the community generally. Authority is:given to the,commission to conduct its inquiry'at such places as are deemed expedient, and to call and examine on oath such person'or persrihs considered"capable'of affording information that might be required; also to call for and examine books or records deemed : likely toY: afford the fullest information on' the subject; matter o!f the inquiry. The commission is required to-report; by/i April,!.,. ~ .■ . ;;. ; ' :