A WARNING TO APPLICANTS FOR SHARES.

Thames Guardian and Mining Record, Volume I, Issue 165, 19 April 1872, Page 3

A WARNING TO APPLICANTS FOR SHARES.

The case of the Imperial Anglo-German Bank, which came before Vice-Chancellor Alai ins last week, is a warning, says the Economist , to applicants for shares in new companies of the risk of loss they run, even when the company is not properly constituted, and never commences business. The applicant’s notion is that in such a case the money lie subscribes will be returned to him, the whole expenses falling on the promoters ; but this is not the case. The prospectus of the bank in question was issued early last year, the capital to be £450,000, in 15,000 £3O shares, half of which, it was stated, had been taken in Germany and 10 per cent, paid thereon, the remaining half being invited from English subscribers. It was also stated that without the payment of 10 per cent, (lie company could not be incorporated by German law, “ and that, before incorporation applicants for shares could not be made liable, and ili ir money therefore must be n turne i in : u I b the undertaking was not proceeded wiih.” The English shares were all tte I in full, and £22,500 paid as deposit. It subsequently appeared, however, that tln-re was no evidence of the German shares having been applied fdT, and the directors were about to return the money according to the prospectus when ,*i petition was filed by the adveitising agent and two of the clerks of the company, the ormer claim ing £1,200. The Vice Chancellor expressed his astonishment at the directors resisting the claim, as there was “ no dispute of its justice,” and the directors had funds in hand. The directors have appealed ; but if the Vice-Chancellor’s view of the law should be confirmed, applicants for shares will require to take new precautions. They arc victimised sufficiently for promoters’ expenses already, even when companies are floated, but it will be quite intolerable if they have to pay preliminary expenses in a case where their money was to be returned to them in full, according to the statements in the prospectus. '