AUSTRALIAN INVESTMENTS

Evening Star, Issue 23698, 4 October 1940, Page 6

AUSTRALIAN INVESTMENTS

CALL PAYMENTS AND “ RIGHTS " SATISFACTORY UNDERSTANDING WITH MR NASH [Per United Press Association.] WELLINGTON, October 4. The payment of calls on Australian shares, the taking up of rights in Australian issues, and the transfer of credit balances from Australia were questions recently discussed with Mr Nash by a deputation representing the Investors’ Protection Association. A report of the discussion has been made available by the association. On the first question it was pqinted out in repeat to Australian Consolidated Industries that as the obligations had been entered into before the regulations wore issued it was only reasonable that facilities should bo made available to pay these calls, particularly in the case of investors who had established funds in Australia for the purpose. It was also suggested that future dividends should be utilised to meet calls. In reply, Mr Nash stated that it was not possible to send remittances from New Zealand to meet calls, nor did he favour the using of dividends for this purpose, but he would take up with the Reserve Bank the question of applying portion of the credits of investors in Australia to meet calls. In regard to the taking up of “ rights,” it was urged that the sale of “ rights ” or the disposal of a portion of the old issue was uneconomic because, assuming the shares so sold could be replaced by other purchases in the Dominion, double brokerage would be involved. The deputation suggested that in the case of those with funds in Australia such funds should bo used for the purpose, as Now Zealand would ultimately benefit, and in any case if investors had other shares which they deemed it advisable to sell the proeeds should be applied for the purpose. Mr Nash was adamant about using current credit balances in Australia, hut considered a case had been made out in respect of soiling other Australian shares than the particular stock where “ rights ” had been issued to provide the necessary funds, and he promised to consult the Reserve Bank on this aspect. Mr Nash had .since advised the association that, in the case of New Zealand holders of Australian shares, who also holds “rights,” he is prepared to agree to such shareholders selling sufficient shares to take up the “ rights,” even though such shares are not those of the actual company in respect of which the “ rights ” are to be taken up. The Reserve Bank has been advised accordingly. In regard to the transfer of credit balances and deposits, Mr Nash said negotiations with the Commonwealth authorities were practically completed, and shortly there would be no further trouble. The association is pleased to report that the Reserve Bank has now issued instructions to the trading banks, giving the necessary permission to transfer funds, as arrangements have been made for the release of these funds by tho Commonwealth Government. The association adds that the impression gained from the interview was that sufficient cash reserves were available in Australia from current accounts or fixed deposits maturing to meet munition commitments in the Commonweal th for the next 12 mouths. “Then,” said Mr Nash, “we will first call on the Commonwealth Government stocks, because these have appreciated since the outbreak of war, and there would not be any material sacrifice either to tho holders or to the New Zealand Government.”