Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 24 August 1960

Private Debenture Issue. Mr. HAROLD HOLT (Higgins- Treasurer). - by leave - On 16th August the honorable member for Macquarie (Mr. Luchetti) asked me a question about a notice exhibited by the Commonwealth Trading Bank inviting applications for subscriptions to debenture stock of Hooker Finance Company Limited1. I indicated at the time that I had no knowledge of the matter and that I should be surprised if such a notice had been exhibited by the Commonwealth Trading Bank. I have since had the opportunity of discussing the matter with the Managing Director of the Commonwealth Banking Corporation, and I am informed that a notice of the nature mentioned by the honorable member has, in fact, been exhibited in branches of the Commonwealth Trading Bank.

The managing director of the corporation has explained to me that the exhibition of the notice arises from the fact that the Commonwealth Trading Bank is acting, jointly with the Bank of New South Wales, as banker to the current issue of first mortgage debenture stock by Hooker Finance Company Limited, which is a customer of the Commonwealth Trading Bank.

The managing director has further explained to me that it is common practice for trading banks to act in selected cases as bankers to public issues of shares, debentures, &c, by their company customers. The service so provided, for which a charge is made, includes the acceptance by the trading banks of subscriptions for limited periods to such issues, and has long been regarded as a normal banking function.

In common with other trading banks the Commonwealth Trading Bank provides such a service in selected cases. In the last two years it has acted as banker to the issue for various of its customers on fourteen occasions.

I have ascertained also that the matter raised by the honorable member for Macquarie has been raised1 before in this House. Towards the close of the 1958 Budget session of the House the honorable member for Bonython (Mr. Makin) asked a similar question concerning the invitation and acceptance by the Commonwealth Trading Bank of subscriptions to an issue of debenture stock by Walton-Sears Credit Corporation Limited. The Prime Minister (Mr. Menzies), as Acting Treasurer, subsequently advised the honorable member for Bonython by letter that the participation of the Commonwealth Trading Bank on that occasion arose from its acting as banker to the issue for one of its customers in the normal course of trading bank business, and that he did not consider the matter called for further action on his part because he did not feel justified in asking the Commonwealth Trading Bank not to provide for its customers a service of a kind customarily provided by trading banks generally.

In view of the comments of the honorable member for Macquarie, however, and as I can appreciate that from some viewpoints it may seem somewhat incongruous in present circumstances for the Commonwealth Trading Bank to publicize debenture raisings of the kind in question, I propose to invite the Commonwealth Banking Corporation Board to undertake a review of the issues involved in the Commonwealth Trading Bank's participation in such cases.

Suggest corrections