NO MILLS

NZ Truth, Issue 1205, 3 January 1929, Page 7

NO MILLS

Golden Flqece That Isn't

COMPANY FINISH (From "N.Z. Truth's" Dunedin Rep.) That the directors of Southland, Woollen Mills, Ltd., have not conducted the business of the company m accordance with certain principles of commercial adminis-tration-defined m the statute, was expressed by Judge MacGregor m a lengthy judgment m favor of a body of shareholders who petitioned the Dunedin Supreme Court for an order for the winding-up of ihe company. THE history of the Southland Woollen Mills, Ltd., makes' one of the strangest stories m the annals of company flotation. Incorporated as a company on September 25, 1924, with an authorized capital of £ 200,000, it was originally resolved to allot 100,000 shares, no forward move to be made until a minimum of £85,000 had been reached. This resolution xvas rescinded at a meeting- of directors m January, 1926. . Calls upon shareholders were made until the full amount of c'ttpital subscribed was £42,504,

£6000 Spent

representing 12/- a share on a total of 69,230 shares.

Nearly £6000 has been speunt m pi'ellminary and general expenses, yet hwestors have never seen the flrst stone laid for the building of the mills which -we're "to weave out their wool and xvealth on an original site m the toxvn of Gore. Shareholders are noxv faced with the prospects of a further dead loss oyer : a contract for £28,000 xvorthof machinery — a contract entered . into by the directors 27 days after it became knoxvn to them that a petition was to be lddged m the Supreme Court for the xvinding-up of the whole business. .: Owing to the protracted, delay^in the enterprise, a referendum, instigated by a number- of parcel -h older s,'i was taken by means of circularizing the shareholders. This way of feeling the , pulse of shareholders resulted m a large majority "voting for the winding-up of the company, and m August last the directors were informed of this. Yet the directorate allowed itself to plunge the company into a binding contract for a full "worsted, mill plant, and tenders were called for the erection of the building on a leasehold site at Gore. On behalf of the petitioning shareholders, j Lawyer Barrowclough placed the matter before Judge MacGregor. .Iri opposing the petition on behalf of the directors representing the company, Lawyer Adams put forward the argument that delay, had been unavoidable owing to commercial depression. At the same tirpe, some £8000 had been saved m retarding the .purchase of machinery and the erection of the buildings. The greater part of the shareholders are said to be South Otago farmers, and news of what the residue of their investment will be is awaited with considerable public interest.