The Belfast-based textile engineering company, Mackie International, never ceases to surprise. One would have thought with the restating of the accounts behind it and a new purposeful management in place, there would be no more upsets. Not so.

The admission about the outcome of the rights issue on Thursday that "owing to administrative problems it has not yet been possible to identify separately the share accepted by those existing shareholders who irrevocably agree to do so" is difficult to comprehend.

It appears that one shareholder who had irrevocably undertaken to subscribe for 727,307 shares had not done so "due to an administrative oversight". Arrangements were subsequently made for that shareholder to take up the shares.

Mackie has been at pains to point out that it was not its error. The second statement on Friday made it clear that it was "an administrative oversight by one shareholder". Nevertheless this was an "oversight" Mackie could clearly have done without.

As the £5 million issue was underwritten, the funds were secure. The result was pretty predictable. Although there were irrevocable commitments to take up 10.5 million of the 30.36 million new shares, or over one-third, around 50 per cent of the total issue was left with the underwriters.

It had a failed rights issue before. In June 1996, for example, shareholders shunned that issue when the shares were offered at 275p. This issue, however, was highly dilutive with five new shares at 20p per share for every one share held.

A number of institutional shareholders had indicated their intention not to take up the latest rights. Allied Dunbar Assurance and M&G's Smaller Companies Fund managed by Abtrust, for example, were not expected to subscribe more funds.

The raising of the £5 million was essential for continued bank support. It was underwritten by it brokers Butterfield Securities, and by a consortium which includes Mr Sul Sahota, Mackie's chief executive, and the family trusts of Mr Pat Dougan, the former chief executive. Mr Sahota had committed £300,000 and Mr Dougan gave a commitment to take up £1 million - he did not take up his rights - who will now be taking up their commitments.

Mr Dougan, in an opportune move, sold half his 26 per cent stake, a year earlier, at 380p per share, shortly after the announcement of results for 1995 which showed a 16 per cent increase in profits to £3.2 million.

He realised £4.5 million for himself and his family trust from that sale, a sale which did not go down well among shareholders. Now with the share price somewhat above the rights price, these underwriters, including Mr Dougan, are unlikely to lose out unless Mackie takes another nose dive.

Mr Sahota who is the driving force behind Mackie's restructuring, and who is held in high regard for his corporate expertise, said he was satisfied with the response to the rights. Describing it as "reasonable given where the company was coming from" and the financial state it was in.

The administrative problems with one shareholder who had given irrevocable undertakings was not the only unfortunate happening since the restructuring was put in train. The other was the decision not to allow the press to attend the extraordinary general meeting on the rights issue in London.

It is obviously not acceptable for a publicly quoted company to exclude the press from shareholders' meetings. Exclusion begs the question: what are they hiding?

Mr Sahota has explained the exclusion as follows: The press does not have a legal right to attend and when reporters attend they do so as guests of the company, that the meeting was focused on one issue which was to approve the rights, and that the meeting was held in the group's solicitors offices. He is absolutely right that only shareholders are legally entitled to attend, but it would be a sad day for openness if companies were to select which meetings the press could or could not attend.

Mackie, however, did allow the press to attend the company's annual general meeting which was held a few days after the e.g.m. so hopefully the e.g.m. decision was a once-off affair. The rights issue, approved at that meeting, effectively more than doubled its equity base. While this is an essential part of its restructuring programme it has plenty of hurdles to pass.

After the restating of 1996's results which increased the published losses from £400,000 to £7.2 million, losses for the first half of this year are estimated at £4 million. Those interim losses will gobble up most of the proceeds from the rights. If it breaks even in the second six months, then a more healthy trend may develop. But if not, the omens will not be bright.