BCRIC BURIED UNDER NUMBERS | .
Premier Bennett's share

giveaway won't work

By VIC STEPHENS

As a free-enterpriser
I am strongly inclined

to favour any
reasonable proposal for
returning the

businesses taken over
by the NDP to private
ownership, but
distribution of shares in

B.C. Resources In-
vestment Corporation
to everyone in the
province is not
reasonable, it #s
ridiculous. —
Far from being an

exercise in free enterprise it
represents massive political
interference in the affairs of
the corporation, and will
result in a colossal foul-up
exceeding even the start-up
of ICBC.

The problems are so
immense as to make it
obvious that the premier’s
proposal was never really
examined by anyone with
any practical business ex-
perience. If it goes ahead,
which I doubt, it will have to
be done at the expense of the
taxpayers; otherwise it could
bankrupt the corporation.

A simple way to grasp the
scope of what is proposed is
to consider what you
yourself would have to do if
faced with the job of
distributing 2.4 million
certificates in -such a way
that every: person in the
province would receive one,
but no one received more
than one.

CHECKING
ELIGIBILITY

A rough outline of the
intended procedure has
already been laid down.
People are to go to some
office, presumably a bank or
brokerage house, and fill out
an application form, then
return some months later to
receive their shares. In the
course of completing the
application there will have to
be a procedure followed to
establish that the applicant is
cligible to receive the
shares, and in the case of a
woman claiming shares for
underage children even that
won't be particularly simple.

There will also have to be
steps taken at that time to
guarantec that cach cligible
person will be able to apply
only at one place, and that
will take some doing. Ob-
viously there will be some
people who will beat
whatever system is applied,
but that is only a minor part

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“every B.C.
resident a shareholder”

of the problem. The real
trouble is in the expense of
making even a half-hearted

effort at eliminating fraud.

It normally .costs a
minimum of $15 to buy or
sell shares through a broker,
which is a comparatively
simple procedure. That
minimum amount multiplied
by 2.4 million people equals
$36 million—a_ substantial
proportion of the total worth
of BCRIC.

_ If that sounds unrealistic
consider ICBC. It sells car
imsurance annually to less
than half that number of
people, and in most cases
the transaction is not at all
complicated, as the price has
already been worked out and
is printed on the form sent to
the car owner. Yet ICBC had

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In our two previous
issues of BUSINESS
financial writer Patrick
Durrant explained and
analyzed the recent

proposal by Premier Bill
to issue free
British
' Resources
Corporation

Bennett
shares in the
Columbia
Investment |
to every resident of the

| province. In this third
article B.C. Progressive
Conservative leader Vic
Stephens offers another,
and more. critical,
viewpoint on the
premier’s plan for making
2.4 million people
“shareholders in B.C.”

to pay $24 million last year in
commissions to agents, and~
its internal costs for paper.
shuffling, not counting the

cost of settling claims,
totalled $34 million.
TOTALLY
IMPRACTICAL
ICBC is performing 2#
routine annual operation
that requires only one

contact with each customer
and no problem of iden-
tification. The share
giveaway will require two
interviews, with an iden-
tification problem both
times.

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STEPHENS “totally

impractical”

eee

Plainly, distributing free
shares to 2.4 million people
is totally impractical—and
that-is only the half of it. The
other half is that there is no
way a company the size of
BCRIC could operate at a
profit if it had to deal with
that many shareholders.

The government has
already provided proof that
its proposal could not
possibly be carried out under
normal rules. It has
from
having to provide each
shareholder with a
prospectus giving the facts
about the corporation's
worth as an investment, and
it has announced that. the
free shares will not be
registered except for people
who accumulate 100 or
more.

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922-0158

Page 55, February 14, 1979 - North Shore News

: - Bee @ wy Tt
oe ar) ;
a . .

Lack of registration means
that the holder of less than
100 shares will be unknown
to the company, so he will
mot receive any financial
reports or other com-
munications as to its ac-
tivities, will have no standing
at its annual meetings, and
cannot even be sent his
- dividend cheque in the mail.

FORGER'S
FIELD DAY
“It is strange for the
premier to talk of in-

troducing the masses to the
rules of the investment game
when all the rules have been
changed. It.is also futile,
because even with - the

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changes that have been
made the program will bury
the company under’ sheer
weight of numbers.
Everyone will have to go
somewhere to pick up their
dividends by presenting
some sort of ducument. —
Apparently there has been
no decision yet as to just
how that is to be done, but
whatever the system it will
be a forger’s field day.

‘How much that operation
will cost cannot be
estimated, nor can anyone
know how big a dividend the
company will be able to pay,
but with 2.4 million

CONTINUED ON PAGE 56

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