COOK’S DREDGING COMPANIES.

Greymouth Evening Star, Volume XXXI, 31 October 1901, Page 4

COOK’S DREDGING COMPANIES.

Law Proceadings Threatened

Report of Goldfields Committee. [our parliamentary reporter.] Wellington, Oct. 30. For soma weeks past the Joint Mines committee have been occupied with consideration of the petition by Mr Easton,

of Dunedin alleging the gross irregularities in regard to the flotation of certain dredging companies known as the “ Cook and and Gray Group.” It was in consequence of the premature publication of evidence given concerning this petition that the Dunedin Evening Star was adjudged guiltv of breach of privilege after an enquiry occupying the attention of the House for a couple of days. Lobby rumor has it that the committee will report that the law should be more clearly defined so as to ensure that all shareholders in arrears with calls should be treated alike. It was established that while several of tho shareholders were sued, Mr and Mrs Cook who at the same time owed large sums to tho Company, were not sued at all.

By the Companies Ac*-, it requires seven shareholders to form and be a company, but in many of the cases enquired into, some of tho seven persons who signed the Memorandum of the Association, never became shareholders in the Company at all. Yet they attended meetings and appointed directors. In view of such wilful disregard of tho Companies Act, the committee are understood to recommend thai proceedings should be instituted by the Grown to test the validity of the Coy’s proceedings.

The evidence further shows that while Mr Cook did not always pay his application money when due, and did pay his allotment money till about nine months after it was due, Messrs Cook and Gray, in tho meantime, drawing fees from the Comyany’s greatly in excess of Mr Cook’s liability. [per press association.] The report of the Joint Goldfields and Mines Committee on the petitition of Herbert E. Easton, of Dunedin, was laid on the table of the House to-day. Petitioner asks that legislation be passed in order to prevent what he alleged were acts of commercial immorality in mining companies known as the Cook Group. The Committee in its report summarises the various charges made and says the same have not been proved and others are matters that should be dealt with by the Law Courts.

In regard to certain charges made in connection with the flotation of the Golden Grey Company, the Committee says the part of this charge which concerns it is the formation of a company merely for speculative purposes on the share market. This is against public policy and is purely a species of gambling and should bo stopped by legislation, All parties knowingly entering into such a transaction are particops criminals. The Committee thinks legislation is necessary to prevent the occurrence of such a case as that alleged to have taken place in regard to the formation of secret rings for speculative purposes by promoters and the directors.

The Committee suggests the law should bo altered to the effect that where any money for application, allotment, or calls is due upon shares, then the same should be noted on the transfer of these shares before it is completed. The Committee recommends that proceedings should be instituted by the Crown to test the legality of certain companies which had been formed by h-ss than seven shareholders as required by the Companies Act. The law shou'd be amended to prevent the “safety” clauses of the act being over ridden and to ensuro> that all shareholders should be treated alike when calls are sued for.

In regard to the charge of “shareholders voting and directors acting when their calls were unpaid,” the Committee found that Cook, acting as director for several companies, had actually passed to himself large sums for brokerage while lie was still owing large sums for allotment charges. The Committee says the law requires amending in the direction of depriving a shareholder of right to vote or act as director until he has paid his allotment money.

The Committee found that Cook had paid for his and Mrs Cook’s shares in the seven companies, whose books were put in evidence, the sum of £2,140, but Messrs Cook and Gray received £1,841 back from the companies for brokerage, secretary’s salary, and director’s fees. The Committee recommends the law be altered on the lines it has indicated, and to provide that all mining companies shall be registered under the Mining Compmies Act. The House on Mr Seddon’a motion, decided that the report of the Committee should bo published in Hansard.