Mr. Forte To The Rescue ?sx .sx A SCHEME to unscramble the so-called Jasper group of companies may be announced before the end of this month .sx For some time now negotiations have been going on between the State Building Society and a group believed to be headed by Mr. Charles Forte , the caterer .sx The basis of the talks have been , firstly , that the depositors of the State should at least be repaid 20s .sx in the pound , even if they may suffer some loss of interest , and secondly , that there should be an offer- on the basis of independent accountants' valuations- for all the shares in all the group companies , whose stock exchange quotations have been suspended .sx Altogether , the State has lent about +7 million to various companies in the group , but the chief problem is the +3 1/4 million borrowed by Friedrich Grunwald , its driving force , at present serving a five-year prison sentence .sx Grunwald also borrowed +1 1/2 million from Mr. Maxwell Joseph , the hotelier , and it seems certain that a solution will depend on Mr. Joseph foregoing a considerable part of this , as well as on Mr. Grunwald and Herbert Murray ( formerly of the State Building Society , now also in prison ) surrendering the greater part of their own personal holdings in group companies .sx Mr. Forte's interest in taking over the group plainly lies in the catering opportunities offered .sx Among the group's assets are the Piccadilly , Rubens and Rembrandt hotels in London , as well as a number of provincial hotels .sx It also owns a number of news theatres and , among others , the " Classic " chain of repertory cinemas .sx Finally , there are 43 billiard halls for which Mr. Forte may well have other plans .sx But there is also a substantial property interest , above all the +4 million Dolphin Square block of flats .sx The scheme therefore hinges on finding a property group to take over this aspect of the Grunwald " empire .sx " More than one property company has already shown an interest in this , but a well-known +15 million London group specialising in residential property seems at present the most likely bet .sx Things at last seem to be looking up for the thousands of long-suffering State Building Society depositors .sx Even if the present scheme falls through- which now seems unlikely- there is a City merchant bank now waiting quietly on the sidelines with an alternative scheme in its pocket .sx New Recruit .sx MR. GERALD GLOVER'S election last week to the board of City of London Real Property provides an interesting link between one of the most active property development groups and a company whose immense possibilities has [SIC] made eyes other than those of Mr. Cotton and Mr. Clore take a long , lingering , glance in its direction .sx Among other things , Mr. Glover is chairman of Edger Investments , the development company whose latest achievement has been the Carlton Tower Hotel in Sloane Street , London .sx Like many another property company it has attracted the backing of a leading insurance company- none other than the Prudential .sx Perhaps even more important , however , for Edger is the backing it enjoys from Development Securities , which owns one-third of the equity .sx This company , whose principal asset is the Dorchester Hotel and whose shares have so far this year risen from 81s .sx to a new high of 110s , is in turn controlled by the wealthy McAlpine family .sx Until now the only connection between CLRP and the McAlpine-Glover interests lay in the vast Stag Brewery site at Victoria , which is 51 p.c. owned by CLRP , 25 p.c. by Development Securities and 24 p.c. by Edger .sx The new move should at least serve to boost the pace of developing this site , from which the +4 million Edger should- proportionately- benefit most .sx With a yield of little more than 1 p.c. at the current price of 28s .sx 3d .sx the shares are essentially a long-term investment .sx But one which should prove rewarding .sx ICI's Bad Example .sx IMPERIAL CHEMICAL INDUSTRIES should certainly have no difficulty in finding underwriters for its next " rights " issue .sx As a result of its decision to revert to the bad old practice , gradually being rejected by the more progressive companies , of letting the underwriters get the benefit of the rights inadvertently not taken up- in this case nearly 3 per cent .sx of the +34 million issue- there has been an underwriting " bonus " of no less than +280,000 .sx It is of course true , as Mr. Paul Chambers , the ICI chairman , has pointed out , that at the time of the issue the rights were worth only 9d .sx a share , and that if the shares not taken up were to be sold for the benefit of the shareholders whose rights they were- the normal modern practice- this would involve considerable administrative work .sx But this is a matter of principle .sx Underwriters are adequately recompensed for the services they perform without the necessity of a pourboire at the expense of innocently negligent- or merely absent- shareholders .sx ICI should be setting a better example than this .sx Forward Strip .sx WHAT tax changes are likely in this month's Budget ?sx One innovation the Government has been seriously considering- and which may yet come about- is the introduction of a flat rate Corporation Tax to replace the present combination of income tax and profits tax on company profits .sx This would have the obvious merit of recognising the important difference between company and personal taxation .sx It would also , I believe , be welcomed by the inland Revenue ( normally averse to any major change ) as a means of helping them in their endless battle against the dividend strippers .sx For those few readers unacquainted with this sport I should perhaps explain that dividend stripping is essentially a device for extracting accumulated reserves from a private trading company without paying tax .sx In its simplest form it used to work in the following way .sx The trading company with , say , +100,000 of reserves and +50,000 of other assets is sold to a finance company for +150,000 .sx The finance company then pays itself a dividend of +100,000 and sells the trading company back to its original owners for +50,000 .sx The latter are then left with the company plus +100,000 in cash- the object of the exercise .sx The finance company , however , whose business is dealing in shares and other property and is thus taxed on capital gains , can offset the +100,000 loss in buying and reselling the business against the dividend received .sx Hence it , too , has no tax liability .sx Revenue's Chagrin .sx Last year's Finance Act- in particular the " blanket " Section 28- was meant to have put a stop to all this .sx But although the crude method just outlined is no longer possible , a roaring trade is still being done- much to the Revenue's chagrin- in some of the more esoteric refinements of dividend stripping .sx Among them are the methods known among the professionals as the " Scissors , " Stock Shunting and the Forward Strip .sx The first two are highly complex operations , usually used in property deals .sx The forward strip , however , was specially designed for those people who have not yet made their profits- actors , for example .sx Here , a company is formed to exploit the actor's services over the next five years .sx In essence what happens is that the drop in value of the shares in this company ( at the end of the five years they are worthless ) is offset against the actor's earnings over the period .sx How many of our leading actors are anxiously waiting for April 17 to find out whether they will be able to continue their forward strip ?sx THIS WEEK'S DIVIDENDS .sx Reyrolle :sx Phoenix .sx HIGHLIGHT of this week's dividend news will come from A. Reyrolle , the big North-country electrical engineers who report on Friday .sx The difficulties through which the heavy electrical industry has passed in recent years are well enough known and they haven't left Reyrolle scatheless .sx These went further than a mere check to growth , and at one time brought trading profits down from the peak of +3,909,000 in 1955 by nearly +1 million .sx Last year trading profits had climbed back to +3,134,000 , but the market is not particularly sanguine that 1960 will have seen much further recovery- profit margins were probably too slim for that .sx Last year's agreement with Associated Electrical Industries for joint research has probably not been in force long enough to bring big savings yet , but it should do so in time .sx Meanwhile Reyrolle has never cut its dividend which has been held at the equivalent of 8 1/4 per cent on present capital for the past four years .sx Earnings a year ago were 25 per cent .sx The interim has been maintained this year at 3 1/4 per cent and expectation is that the final will again be 5 1/2 per cent- anything more would please the market .sx The shares have risen in the past two months by about 7s .sx in line with other heavy electricals , on hopes that the industry has now passed its worst .sx Chemicals Prosperity .sx Better profits are expected from Associated Chemical Companies when the figures for 1960 are announced next Thursday .sx A.C.C. , formerly British Chrome & Chemicals , has expanded rapidly in recent years and is now a sizeable group controlling assets worth more than +11 million .sx Trading profits have risen from about +250,000 to +1,345,000 in the past 10 years .sx Last year's total distribution of 15 p.c. came from earnings of 38 p.c. so an increase is well within the company's powers especially as the cash position is good .sx On the other hand the directors may be conservative again because of expansion plans .sx A free scrip issue cannot be ruled out .sx It must surely come some day with reserves and undistributed profits now totalling nearly +4 million by comparison with an issued equity capital of +2,154,000 .sx The last scrip issue was seven years ago .sx Profits of Mitchells , Ashworth & Stansfield , the Lancashire manufacturers , dyers and printers of felts who now have considerable interests in the carpet trades , are expected to be lower .sx This will have been caused by running-in troubles with their new plant .sx There can hardly be much fear , however , of a reduced distribution , so strong is the company's financial position .sx For several years past the company has added a 6 1/2 p.c. tax free distribution from capital profits to its dividend .sx Cash Resources .sx A year ago the balance sheet disclosed cash and investments totalling nearly +800,000 by comparison with an issued capital which is still only +417,000 after the one-for-four scrip issue .sx Two-thirds of the investments are in quoted stocks and some shareholders have been pressing for a return of capital .sx Steps are in hand to repay the +119,000 of Preference capital and interest in the company's report centres chiefly on what further moves will be made to distribute some of the surplus cash resources .sx The 5s .sx shares of Phoenix Assurance have risen about 30s .sx this year and 50s .sx from the low point last year .sx This reflects market hopes that there will at last be an increase on the 100 p.c. dividend maintained for the past six years , albeit with one tiny scrip issue of one-for-20 .sx Nevertheless Phoenix shares at around 160s .sx still yield just over 3 p.c. This is high by comparison with the 1 1/4 to 1 3/4 p.c. returns shown by such companies as Equity Law , General Accident , Legal & General and Eagle Star .sx But after the 'no change' shock from Legal and General it would be as well not to expect much .sx Italy Seeks Firms From Britain .sx ITALY is actively looking for British firms wishing to start manufacturing within the Common Market .sx Already Inbucon , a British firm of business consultants has been engaged by Finmeccanica , the large holding company , to look for suitable candidates .sx Finmeccanica has substantial interests in Alfa-Romeo and Ansaldo , the important Genoa shipyard .sx It is offering to finance wholly or in part new British manufacturing ventures in Italy .sx Finmeccanica is itself owned by the vast semi-autonomous Government agency , the Institute for Industrial Reconstruction ( I.R.I. ) ; which has majority shareholdings in a large number of Italian heavy industrial concerns , public utilities and banks .sx No Future For Small Atomic Reactors ?sx .sx News that Hawker Siddeley is withdrawing from the nuclear power business has confirmed the growing belief that the making of small atomic reactors has a long way to go before it becomes a commercial proposition .sx