SPECULATIVE PROMOTION OF MINING COMPANIES.

Taranaki Daily News, Volume XXIII, Issue 257, 31 October 1901, Page 2

SPECULATIVE PROMOTION OF MINING COMPANIES.

REPORT OF PARLIAMENTARY COMMITTEE. SUGGESTED REMEDIES FOR ABUSES PER PRESS ASSOCIATION. ( Wellington, October 30. The report of the jbint Gold fields and Mines Committee on the petition iof He-hurt Easfon, of Dunedin, was [laid on the table of the Hmt-e to day. P tition-.r ; sked that legiJatiqp ba passed to prevent what he alleged were acts of commercial immorality in certain mining companies, known as the Cook group. The committee summarises the charges made, and says some have not been proved, and others are matters that should be deals with by law courts. In regard to certain charges made in connection with the floating of the Golden Grey Company, the committee says the pirfc of this charge which concerns it is the formation of a company merely for specularive purposes on the share market. This is against public policy, and is purely a species of gambling, and should be stopped by legislation. All parties knowingly entering into sujh a transaction are partkeps crminis. The committee thinks legislation is necessary to prevent the occurrence of such a case as that alleged to have taken place. In regard to the formation of secret rings for speculative purposes by promoters and directors, the commit ee suggests the law should be altered to the effect that where any money for application allotment or calls is due upon share?, then the same should be noted on the transfer of these shares before it is completed. The committee recommends proceedings should be instituted by the Crown to test the legality of certain companies which had been formed by less than eleven shareholders as required by the Companies Act, The law should also be amended to prevent the " safety " clauses of the Act being over-ridden and .to ensure that all shareholders should be treated alike when calls are sued for. In regard to the charge of "shareholders voting and directors actiDg when their calls were unpaid," the committee fomnd that Cook, acting as director for several companies, had actually passed to himself large sums for brokerage while he! was still owing large sums for allot-1 ment charges. The committee says] the law certainly requiries amending in the direction of depriving a shareholder of his right to vote or act as a director until he Las paid his allotment money. The committee found that Cook had paid for his and Mrs Cook's sharos on the seven companies who?e books were put in evidenco the sum of .£2140, but Messrs Cook and Gray received £1,841 back from the companies for brokerage, secretary's salary, and directors' fees. The committee recommends that the law be altered on lines it has indicated, and to provide that all mining companies shall be registered under the Mining Companies Act.

The House on Mr Seddon's motion decided that the report should be published in Hansard.