CORRESPONDENCE. HONEY CONTROL CONTROVERSY.

Hokitika Guardian, 25 June 1926, Page 3

CORRESPONDENCE.

HONEY CONTROL CONTROVERSY.

(To the Editor.)

Sir, —Further to my letter of tlio loth List, in connection with the operations of the Honey Control Board. Quite, an interesting criticism of the business methods adopted by the Honey Producers’ Association cropped up at the annual meeting held in Hamilton on the Bth List. First, let my say that Mr John Rentoul is the Managing Director of the 11.P.A. as well as Chairman of the Honey Control Board. Two other Directors of tlio JI.P.A. are also tlie other two members of the Honey Control Board. Of these three men. one is a chemist, another an ex-sehoolniaster and the third is a drain pipe and tile maker. I have been asked if it is likely to

end in a “Trust” being formed. I will leave your readers to form their own opinions after they read that Mr Rentoul admits that tlio average loss for the past four years had been £1215

initially. The Company’s Auditors, Messrs

Thomson, Gray and Rodger, of Auckland, comment thus:—“ Wc beg to draw attention to the fact that the total liabilities of the company, as shown by the balance-sheet (other than capital) exceed the assets by £7377 18s (id. Against this the uncalled capital on shares issued amounts to £O2OO us •Id, so that it is obvious that further losses of capital cannot continue without jeopardising the position of the company. Mr Cottrell said:—“From the tenor of the auditors letter, is it not a fact that the whole of the calledup capital has been lost? Mr Blank (Chairman of IT. P.A.) said: It has been practically all spent. Is any part of the loss sustained attributable to some of the late Managers? Part of it is. The Chairman saitl the paid-up capital had been spent, but not lost. Tlio proprietary article was certainly the only asset that could be put against a loss, but shareholders retained their goodwill (?) in the company.

There was a loss of over £llOO on the current year’s working, was there not? Mr Rentoul said he would not answer the uestion.

The average loss for the past, four years had been £1215 annually, will you admit that? That is so. If the Association were to ge into liquidation now would it pay 20s in the £ ? That depends largely on what the proprietary article could be sold for in Loudon. And also on Die uncalled capital? That is so. Mr Rentoul admitted that about £II.OOO was owing to tin' London agents for advances to producers.

Mr Cottrell said: What is there to offset that? Air Rentoul: Only the uncalled capital of the company. Ther.e is £II.OOO deficiency? That is so. we have no stocks against the amount.. Are the debentures which were issued registered with the Registrar of Joint Stock Companies? 1 am not certain, but 1 do not think so. Air Cottrell: You are under a liability for not doing so. I suppose you know that? The Chairman protested against the detailed nature of the questions, explaining that the Directors had not sufficient data before them to allow them to answer properly., Had the company earned a dividend that year and knowing the finances of liie If.P.A. you would recognise that the payments were paid out of borrowed money?—The Chairman: Afore or less.

Is not 5 per cent, on the gross value an excessive commission to allow the London agents?—Mr Rentoul: AYe do not consider it an excessive charge. Air Cottrell moved, as an amendment: to the motion for the confirmation oT the Directors’ report: “That in view of tile whole of the paid-up capital and the larger portion of the uncalled capiul being absolutely lost ns disclosed by the balance-sheet, and the letter received from the auditors in connection thereto, this, the annual meeting of the Association, records its want of confidence in the present directors and further, this meeting passes a vote of censure upon them for their mismanagement of the affairs and finances of this Association and calls upon them to resign in writing.” There was no seconder for the motion so it lapsed. The report was then confirmed. Air Cottrell rose to move further amendments, but was ruled out of order by the Chairman. You say wlint lias this to do with the Honey Control Board? Just this, in a nutshell: Tf you ran place your honey on the London market for 9s lOd per case would you I>o in favour of sending it through the Money Control Board, wait for your account sales until they thought fit and pay 21s 7d per case instead of 0s 10d Tor the honour of sending your honey through the Control Board ? T am, ole.. JOHN AfURDOCH. Ross, June 21th, 1920.