Fiji Go's Minor War

Emperor Mines Versus Australian Tax Commissioner

rpHE war between the Australian Taxa- X tion Department and the Emperor Mines Ltd., of Fiji, in regard to the distribution of profits, is still going on.

The mining company is owned mostly by Australian investors. Its profits al ready have been taxed heavily in Fiji.

If the remaining profits are divided in the usual way among shareholders, they will be so further reduced by taxation in Australia that there will not be much of them left.

Back in 1943, the late Mr. E. G. Theo dore (chairman of Emperor Mines) being resentful of new angles of taxa tion introduced by the Socialist Govern ment in Australia, decided to keep the company’s profits in Fiji, and, from time to time, return to the Australian inves tors a portion of their capital. This was clever, and it worked this way:— The Emperor shares have a nominal value of 10/-. Last dividend was 6d., paid in respect of 1942. This was equal to 5 per cent. Since then, by way of re turn of capital, the shareholders have received 6/- per share; and it is now proposed to “return” another 3/- per share, making 9/- per share altogether.

The shareholders thus will have received 9/- per share, spread over eight years, which is better than 20 per cent, per annum.

Nominally and legally, the value of each original 10/- share is thus reduced to 1/-; but the holder of each share has still an interest in the Fiji mines (represented by plant, etc., and the still undistributed profits) of well over 10/- per share. The problem, of course, is how he is going to get it, free of taxation, while the present Australian taxation laws exist. Ap parently, if he is going to enjoy the full fruits of Emperor’s success and Mr. Theo dore’s foresight, he must go and live in Fiji. One could imagine a worse fate.