NER-SAG COMPANY

Hokitika Guardian, 25 January 1929, Page 5

NER-SAG COMPANY

MISSING EX-CHAIR MAN

FICTITIOUS BALANCE SHEET

'United Press Association-By Electric

Telegraph—C ipy right)

LONDON, Jan. 24

The meeting of Nor-Sag, cabled on Kith. Jail, declined to pass accounts and decided to appoint two new directors. Haekett (one of the new directors) presiding, presented a fresh account showing a deficiency of £27,017, whereas the original balance sheet signed by Brandreth’s showed a profit ol £lO-1.000. Haekett stated Brandretli had a 10 years’ agreement with the Company, receiving £ISOO per year plus an allowance of £IOOO for travelling expenses and a com mission of 3;J per cent, on all sales. His wife’s remuneration was £3OO per year plus £2OO travelling expenses. Their whereabouts were sti. unknown. The books and papers relating to one set of transactions wor missing. Brandretli had stated that his gardener had burned them under a misapprehension. (Laughter).. Hackel said lie thought''some of the sales which Brandretli had said he had made, had never occurred and the entries relating to them wore fictitious.

The directors of Ner-Sag Ltd. created a sensation on the Stock Exchange on January 16th. by announcing publicly that the whereabouts of Brandret 1 and his wife (who was a director of the company) could not he traced, and that mey had not fulfilled promises to supply information to a meeting on January I.lth The new chairman, Sir John Biles, announced that it must he concluded that Bramlreth’s accounts were unreliable. Therefore, it was not ]> r posed to pay a final dividend or distribute a bonus on shares. Brandretli began making supports for mattresses on the smallest scale, in hitiny home at Ilford. The business, stafl and premises grow and grew, and a company with a capital of £100.060 was formed in 102 i. £1 shares of which reached £6. A Near-Sag overseas company was formed last year, with a capital of £250.000. Shares advanced rapidly, hut consequent on the announcement of January Kith, dropped from -13 s 0(1 to 30«.

Last December some questions were asked about the allotment of shares. In an interview on December 12th. Bra.nd.reth said that the issue of 25.600 shares to himself in December. 1027. was made at par. The market price at that time was about 38s. The shares wen’ issued to him as part of the purchase price for the world rights of Nor-Sng mattress supports. The rights to flic shares on that date, he said, “had no market value.” The allotment of 25.000 shares in Ner-Sag on February 22nd. last to Messrs Windsor and Mabel was made at £2 for tlio pound shares. The market price then was around 755. These shares, Brandretli said were sold to the market. Brandretli said that the opportunity was not given to other shareholders to participate in this issue “because 1 would have had shoals of letters, and I also might have been blamed supposing the shares bad gone down.” In reply to the inquiry regarding the oversets shares. Brandretli stated that the whole of these shares held hv the parent company had been sold, though it did not follow that they had no holding at the present time. The parent company actually only received 360.000 shares, the balance of 140.000 going to Brandretli in settlement of the balance of £IOO.OOO due to him on foreign rights.

On December 13th. the “Daily Express” said that the directors of Ner-Sag intended to propose an increase* of capital from £IOO.OOO to £200,000. the new capital to he offered to shareholders in Ner-Sag in the proportion of one for two at par. and to shareholders in the overseas company at one for twenty at oar. The “Daily Express” financial writer added : “I have, however, been informed by tbe elmirman that at the date of the balance-sheet the company bad £18*5.000 in giltedged securities, and it is difficult to sec wliv in these circumstances the company should re(piiro more money. Before these proposals are agreed to, shareholders should he satisfied completely on tlie numerous ijiiestions arising out of the accounts to he presented at the meeting. They should also stipulate that the articles of association should he revised, so that all issues of shares in future must be offered pro rata to shareholders.”