COMPANY LAW

Sun (Auckland), Volume III, Issue 796, 17 October 1929, Page 7

COMPANY LAW

NEED FOR TIGHTENING UP STRESSED QUESTIONS IN HOUSE THE SUX'S Parliamentary Reporter PARLIAMENT BLDGS., Wed. Alleged breaches of the Companies Act were the subject of questions in the House of Representatives by Mr. J. McCombs (Lj’ttelton), who dealt with the establishment of two banks in New Zealand which were not registered in the Dominion. He wanted a tightening up of the Companies Act and gave notice to ask the Minister of Finance, in view of the fact that, following on Parliamentary authority for the formation of a new bank, two other banking companies, with New Zealand directorates, have been promoted and registered in New South Wales to avoid New Zealand restrictions, and have both issued prospectuses in New Zealand which do not comply with the New* Zealand Companies Act, and that one of such companies has already been placed in liquidation at considerable loss to the subscribers, who are forced to bear the promotion expenses, would the Government urgently take steps to provide for the tightening up of the provisions of the Companies Act with regard to the flotation and prospectuses of new companies and prohibit the issue in this Dominion of any prospectus, whether of companies registered in New Zealand or abroad, which do not comply with the New Zealand Act. “The Companies Act passed last year in England prohibits the issue of prospectuses of companies registered abroad, which did not comply with the provisions of the English Act,” said Mr. McCombs. ”Is v it a fact that many of the prospectuses of new companies, recently promoted by share-selling concerns, do not comply with the provisions of the Companies Act, and why is it that the registrar of companies does not, or is unable to take steps to enforce compliance for protection of the public?”