EARLE HERMANN'S CASE.

Taranaki Daily News, Volume LVII, Issue 252, 3 April 1915, Page 4

EARLE HERMANN'S CASE.

SOME MOgp TROUBLE.

By Association—Copjjn^ht,

Sydney Awil 1. At the annual meeting of Is»wroil Brothers' lisport Trading Qampaiiy, Alexander Jotison (director) presided and explained that he was sow the only local, director of the company. J&« rl-% Hermann's place had not been filled, and F. W. lSacon had resigned. Mr. Jobwon was, re-elected director, lie stated that h<s desired to obtain an expression of opinion on the question of instituting crimjnal proceedings against J. Karlo. Hermann, respecting allegedly fraudulent dealings m the company's shares, lie outlined tliQ rteps taken to secure Henmimi'ii resignation of tho ihairmaii ship of the hoard. Hermann, '.e saUl. had virtually admitted that there had been irregularities a Heeling on'.y a.\>ont twenty thousand shares. Hermann au'.'. sequently produced fraudulent scrip and transfers representing 35,0 shares, which wore destroyed. He that there were still about 20,0(8) share* outstanding. All scrip then called in, and as a result the total of the bogus shares rose to over 133,000, making, with 35,000 redeemed by Hermann, a total of over KifyOOO. Hermann liaa admitted issuing t ! >ese, but pleaded that lie was not in his proper state of mind. •They, however, were issued at various periods, dating from M#y, 1912, to March, 1914. In one ei\se the certificates had simply boon torn out pf ft hpoH, the butts not filled, and the scrip signed, not at a board mooting, but at any old time. In some eases the scrip was U't sealed with the seal of the company. In others, one or more signatures were forged, hut many appeared to bo legal certificates. He had obtained distinguished counsel's opinion on this side. Counsel held that perhaps half of the fraudulent scrip certificates, representing 60,000 shares, would "bn held good as against the company, and it was likely that many holders of (he other half would fight. He took it that a new company wouM emerge out of the old one. The business was undoubtedly good, and t ! ie trading figures big, and it would be a great pity if it were sacrificed.

After discussion tlm meeting decided that the directors he asked to prosecute Hermann if his appeal from the recent sentence proved successful, and also favored the general suggestion of the New Zealand board as regards a clean-up of the irregular shares, and promised support of any reasonable scheme of readjustment. , Received April 3, 12.25 a.m.

Mr. Till, representing 20,000 shares, said that no doubt a great deal of the trouble had occurred through want of care on the part of the directors, and it might be advisable in the event of reconstruction to alter the name of the company altogether. If they were unprepared to subscribe more capital, liquidation would follow, and New Zealand people, knowing the value of the business, would buy in.