To the Editor of the "Nonru-Cuia Day News"
Sm—I have reed "Inrenrste's" letter in to-day's issue of your paper the American-Oriental Banking Corporation's "B" Common Shares and should like thoroughly to endorse everything he says.
Twas in the American-Oriental Finance Corporation for just over year and resigned as from Ist inst, to establish a new Company. I am, therefore, in a position to write with authority' on this matter, On May 28 we wrote to the American-Oriental Finance Corpora~ tion on the basis of the facts referred to by "Inrenesten." We reminded the Corporation that, when I was in its employ, a number of B Common Shares had been sold to clients and that at every Sales meeting those present were urged to push those hares, Tt was stated frequently that the Bank would at any time buy them back at §2 less than the clients pald for them. It was added that I could produce witnesses confirmation of that statement and that T- specially remembered how strongly it was stated that the liqulating value would never be less than $26, Purchasers were assured that the maximum they could possibly lose would be $2 per share.
On May 20, we wrote to the American Oriental Bank enquiring what dividend, if any, would be paid at the end of the current half-year. On May 23, a letter was addressed to us, slying no very precise answer to the Inquiry. Tt was not received until May 24, the day of the Bank's closure. Had we received it earlier we should have taken immediate steps to insist that those shares were taken back on the terms indicated above. We also enclosed in our letter of May 28 a list of nine clients holding 1,060 of the shares in question, amounting '9 about $23,000.
I might further disclose a_ fact about thesame of these shares. Salesmen in the American-Oriental Finance Corporation were given a commission Jor $1 a share. When one considers that the usual local brokerage is. per cent. and that we were being offered almost per cent. viz, §1. fon $22—it can be seen how eager the people in authority in the Bank must have been to get rid of them. It- might also be observed, in view of the above, that the salesmen them. selves should have hesitated to recommend them to their friends but, Inasmuch as the majority were sold last June when the Bank was about declare a half-yearly dividend of $1 (which they did) and again, as there was every prospect (as we were assured) that they would pay further $1 or at least $0.60 at 1 end of December, 1994, (actually they ald. $60—making a total of $1.60 for the year), and bearing in mind the undertaking we had been given that the Bank would at any time take back shares we (the Salesmen) had sold, at $2 less than was paid for them, it is obvious that the chances were, for a period of just over six months, clients would make money, of at least come out almost square. Could the same have been said, with any degree of certainty, any' other local securities over the same time?
I would like to add, in conclusion, that 1, of course, had no idea the Bank would close. We wrote them fon May 20 regarding the prospects oF otherwise of a half-yearly dividend, Simply because it occurred to ws, with the present favourable rates of exchange, clients could more pro-Sitably and securely invest their surplus funds in sterling.
Text read from the printed page and cleaned; old type leaves the occasional error.