LOYAL LIMITED

Waikato Times, Volume 127, Issue 21196, 20 August 1940, Page 6

LOYAL LIMITED

TOBACCO CONCERN ACTIVITIES OF DIRECTORS RAISING OF CAPITAL (By Telegraph. —Press Association) AUCKLAND, Tuesday The public examination was resumed in the Supreme Court today into the conduct of Edward Valentine Owen, of Howick, and Michael Maher, of the Provincial Hotel, as directors or officers of Loyal Limited, a tobacco company in liquidation. The examination includes consideration of the affairs of the Consolidated Tobacco Company, in liquidation. Mr V. R. Meredith and Mr N. I. Smith conducted the examination on behalf of the liquidator, and Mr A. H. Johnstone, K.C., and Mr R. Mackay appeared for the examinees. Edward Valentine Owen, further examined, gave details of payments made to him in respect to the purchase by the company of his blends and formula. In June, 1934, he received £3OOO and a month later £IO,OOO through Mr Gibson, of the New Zealand Investment Trust, who held power of attorney, and took 10,000 shares in the company. Amalgamation Suggested For several months he was in constant touch with Mr Gibson while Loyal Limited was endeavouring to raise its capital to £IOO,OOO. Mr Gibson suggested this, and favoured a general amalgamation of various tobacco companies. Mr Beckerley was not the solicitor for Loyal Limited but acted as negotiator. He paid Beckerley over £2OOO for his services and paid Maher also over | £2OOO. At one stage, said witness, he quarrelled with Gibson and broke off negotiations with him, but later they got together again and he got Gibson’s demands on Consolidated Tobacco Limited reduced. The amalgamation with Consolidated Tobacco took place in June, 1935. In the agreement Gibson and Company got £18,500 commission, half from each company, Consolidated Tobacco taking over the liability of both companies. Payment of Dividend Loyal Limited had to raise its capital to £IOO,OOO. A dividend had been paid by Loyal Limited at the end of the year in April, 1935, but he could not remember if it were paid by borrowed money. The sum of £SOOO was borrowed from the New Zealand Investment Trust. In a letter to shareholders advocating amalgamation witness did not mention the cost in commission. Witness was examined as to items in Loyal Limited’s prospectus to raise £70,000. He did not agree that £BOOO was short-paid in duty, and the prospectus .did not show that such an amount was short-paid in the previous year’s operation. The £70,000 was obtained from the public. When the examination of this witness ended the Court adjourned until tomorrow, when his re-exam-ination commences. A report of yesterday’s proceedings appears on page 7.