Companies’ Amendment Bill.

Hokitika Guardian, 20 October 1922, Page 1

Companies’ Amendment Bill.

WELLINGTON, Oct 18.

The Companies Act Amendment Bill which was introduced in the House of Representatives to-day, is a measure of one operative clause. It provides that if it appears to the Court that any company is financially embarrassed, and that it would be contrary to tlici interests of the creditors of the company as a whole, or of any class of creditors, or contrary to the public interest, that the company should be wound up, the Court, on the application ,of the company or of its own motion, may direct a meeting to be held of the creditors of the company, or any class of creditors, for the purpocs of considering the expediency of making some arrangements or comprohii.se with the company.

The meeting is to*.,bo held as directed by the Court, which may select a chairman, give directions n.s to procedure, and decide any other matter affecting the convening and conduct of .the meeting. If any arrangement or compromise is agreed to by a majority in number representing three-fourths in value of the creditors present in person or bv proxy, the Court may order that such arrangement or compromise shall bo binding upon the whole of the creditors of the company, or the whole of the class of creditors entitled to attend tlio meeting, and the arrangement or compromise shall take effect accordingly. An application to the Court to make use of thes powers may ho by petition, or if proceedings have lieeu commenced for the winding up of the company, by motion in such proceedings.

Tlio Bill is a measure of more importance than appears on the face of it. The Hon S. P. Lee, in introducing the Bill, said the necessity lor it was a matter that the Prime Al.inister would explain to the House later: A similar provision lie added, had been in operation for a. time in New South Wales. It will he remembered that recently, in the House, the Prime Al.mister hinted tlio ttlier were two or throe big companies in the Dominions that might have to go into liquidation.

All* Alassev added that these companies wore outside the cities. It is quite

freely stated that these companies are co-operative concerns. Some financial authorities have, expressed the opinion that it might be necessary for the Government to come to the assistance of these concerns. Others equally skilled in matters of finance express a contrary opinion, a;t laost in so far as companies that may be insolvent are concerned. They state that the Government could not possibly be expected to carry tllesp on for an indefinite period of years. It is 'not as if they were national concerns, such as tbe Bank of New Zealand at the time when it was saved from dis*’asteir by the Government of the day. The Bill introduce to-day may be the means (of ,'retestablisbing these companies oh a sound footing.