CAN VOTE AT POLL

Sun (Auckland), Volume IV, Issue 1069, 5 September 1930, Page 1

CAN VOTE AT POLL

DEBENTURE-HOLDERS’ RIGHTS

SUPREME COURT DECISION j All holders of debenture stock in New Zealand Redwood Forests, Ltd., whether fully or only partially paid up, will be able to vote at a poll ou extraordinary resolutions to be presented to a meeting of debentureholders on September 11, when proposals involving the acquisition of further land, and alterations of the terms of the debentures, will be submitted. This is the effect of a reserved judgment delivered by Mr. Justice Herdman in the Supreme Court today, on an originating summons taken out by the afforestation company, asking for directions on the effect of a deed of covenant securing the debentures made with the New Zealand Insurance Company, Ltd., as trustee. The covenant covered the issue of 6.000 £35 debentures, of which 70 per cent, have been partially paid up, and 30 per cent, have been fully paid up. His Honour pointed out that a clear majority in value of the whole of the debenture-holders must be present to pass an extraordinary resolution, and to determine whether the meeting was properly constituted, the value of holdings of debenture-holders, who had not paid up to £35, was an important factor. No difficulty arose if a vote was taken on a show of hands, but doubt was created by a following clause, which allowed every debentureholder, on a poll being taken, one vote for every debenture fully paid up. It was contended that this disfranchised partly-paid debenture-holders. PROTECTION OF INVESTORS The judge considered that the provisions of clause 20 afforded reasonable protection to investors against being forced unfairly to acquiesce in the surrender of their rights against the company. The effect of the provisions was that the individual shareholder would not vote, but that his contributions would decide the question. He was satisfied that the count ing in a poll of the value of the interest of the partly-paid debenture-hold-ers was not prevented, otherwise this section of stock-holders would be able to participate in voting on a show of hands, but not in a poll. His Honour held that holders of partly-paid debentures were entitled to take part in a poll and to vote, but that the extent of the value of their vote was determined by the amount actually paid on the debentures.