PROSPECTUS-CONTROL

Hokitika Guardian, 27 February 1926, Page 4

PROSPECTUS-CONTROL

A NTT -TR A F FICKIN G DOWER AND IXDEPEN DENT REPORTS.

Though the discussion of the recent New Zealand Alining Conference in Dunedin does not seem to hare Jed to any concrete result with regard to the question of Ministerial censorship of mining prospectuses, it has brought to light the fact that Queensland has for two rears possessed legislation nhioh puts a very strong .Ministerial brake upon the promotion of petroleum propositions.

Promoting booms often run temporily in specialised ruts, in Queensland two or three rears ago it was petroleum. In Xew Zealand we have laid mining Looms of various kinds, and more recently it has boon tree-planting, and also Kawarau mining.

In both the last-named cases, a tree

u-e lias loon made of ill o names and reports of Government Departments or Government officials. ! his lias been done cither in prospectuses or in pro-motion-pull's or in published propaganda. Question Juts been raised as to the degree lo which it is legitimate to euote the Forest Service in one case ami the Minos Department in the other ease. And it lias been suggested tin 1 iho Minister in charge of the Department concerned should have some -ay as to quotations from departmental tenorts. and particularly as to tin* man nor in which such reports are work 'd into propagandist passages that n on Inin other statements to which the ’•><■

partmont lias never given utterance. Q EOT AT TON OXI,Y BY CONSENT. The Queensland legislation ref.'.ae I to, tiie Petroleum Act. goes to the heart of the matter in quite unambiguous language. I t lavs down that. except with Die express rnii>cnt of the Minister, a petroleum prospectus shall not contain any extract or statement taken from any official document of the Department. It also prohibits any statement to the eilcet that the prospectus or eogn ite proposals have received the approval or sanction of the Minister. In other words, allegations of Ministerial approval are barred, and quotalion is made subject (o the .Minister's consent. If this- enactment merely applied to petroleum prospectuses d would lie going a. long way. But '.then the Queensland Act speaks ol " prospectus” it. easts a very wide net indeed, because Hint word includes nil Masses of promoi ion propaganda and all kinds of oropagn mlist matter that may he used at anv time by the share salesmen to sell previously unaliol tod shares or new shares, or anv other form of invest meiit in a petroleum proposition. ADD PROPAGANDA I NCf.I'DER. Here are two sections lli.it speak for I licmsel ves : "The term ‘prospect us ’ means and includes any prospectus, noiice. circular. advertisement., or other document or writing ormiared with a view to udttce. or that may have the effect of inducing, any person to advance money to or towards or to invest money in anv project, business or enterprise tor tin grant or acquirement of a permit or lease or the eomieciieement or carrying on of prospecting or mining operations.” Everv prospectus directly or indirectly* issued or published by or on behalf of a company or by or on behalf of any person who is or lia.s been engagfr! or interested in the formation of a romeaiiy shall he daled and signed by everv director of the eonmaiiy or i very person who is named therein as n proposed director, or by his agent authorised in w riting, and also by every

promoter and vendor.” By the above scheme, it is 'hoped in rone in every scrap of paper used by the salesmen, and rn'rv man liehind ev.'i'v pun in the promotion eatnpuipn—however securely lie may he “ dtip in.” MIXISTKH MAV XOMIXATK I'M I’lltK. Ol.Ut r provisions set out that he I'oro a prosiiectits is issued or published. it must I'c siihmitted to the .Minister lor approval 'I" i.<>.i being so approved, a eopv ' .ill lie tiled with the Ministcr.” On being so submit ted to (':c .Minister, it shall, it so required by the Minister, he accompanied by a report of a geologist approved by the .Minister, i his latter leatnre evidenily implies that when the prosneetiis goes to tin-

ptthlie. it tuny po (if the Minister 1 leases) balanced by the report of a geologist independent of t : he promoters. ’I he searchlight on the men behind the pun seems to he very thoroiiph. for umler this head the Act provides that

every prospectus shall give the names and addresses of directors, and the minimum subscription upon which the direetois may nroceed to allotment. Kill I information must he piven of shares or debentures to lie issued as a consideration to lessees, vendors, or promoters, and the consideration for w.iii'h these people have obtained such shares or debentures. XO KAtil.Y TMtOI'IT TAKIXO. r l'o prevent vendors or promoters, or ” pround-lloor investors” from, selling old their paid-up shares before the property they conveyed to the company has piven some tangible indications of honest value, the Act provides: "The Minister may direct that sudh fully paid-up or partially paid-up shares shall not he olfored for sale or translerahie until the first boro on the area covered by the permit, or comprised in the lease, is sunk- and completed." the names ami addresses of vendors of property must he stated. The consideration must he set mil in full, distinguishing between cash, shares, and debentures. In short, the legal inquisition set up by the Queensland Parliament for the probation of petroleum, .propositions appears to he very thorough. It is probably the sharpest legislative implement of its kind in Australia.