Sir John D. Hay, Member for -Stamford, has again been
before the public this week. It will be remembered that he was Chair- man of the Canadian Oil Works Corporation, the Company which bought some exhausted oilworks of one Longbottom, agent for one Prince. The wells turned out to be worthless, and there was a scandalous trial. It now appears from the evidence given in a suit brought against him by the official liquidator that Sir John Hay never bought his qualifying shares, but was given his qualification as director, and as the liquidator alleges and Vice-Chancellor Malins has decided, out of the funds of the Company. A cheque for £1,000, drawn by the directors of the Company, was handed to him, with which he paid for his shares. It was contended that the cheque was paid by Mr. Long- bottom, to whom the Company owed money, but the Vice- Chancellor said, "In cases of this kind, the Court was bound not to be blinded by the semblance of purity in a transaction which enabled a chairman and director of a Company to evade the due performance of his duties,"—the first of which clearly is to be what he professes to be, namely, confident enough in the concern to risk his own money in it. If he is not confident enough in it, or too poor, the public is deceived. It is useless to say the directors may want a particular man as Chairman, and are en- titled to pay him for his services. Of course they are entitled, but then they are bound to publish the fact. They are no more entitled to use shareholders" money to buy a Chairman in secret, than they are entitled to use it to buy diamond breast-pins for themselves.
Previous page
