TRUSTS' OPERATIONS

Ashburton Guardian, Volume 54, Issue 256, 10 August 1934, Page 5

TRUSTS' OPERATIONS

POLICE IN POSSESSION.

INQUIRY OPENED AT SYDNEY. EVIDENCE BY THE DIRECTORS. (United Press Association—Copyright). SYDNEY, August 9. When the Royal Commission inquiring into the operations of 17 companies opened its sittings to-day, Mr ft. Windeyer, K.C., appearing for the Investment, Executive Trust of New Zealand, Ltd., and the Southern British National Trust, Ltd., protested against the action of the police in taking formal possession of the office of the company. Mr Windeyer represented that thereby the police were obstructing business and creating an embarrassing situation for which there was no legal warrant. Dr. P. Louat, appearing for the British National Trust; Ltd., the British National Investment Trust, Ltd., and the Sterling Investments Co. of New Zealand, described the police action, as high-handed. It lire vented the directors having access to their own books and records in order to prepare their defence. The Commissioner, Mr Justice Haise Rogers, replied that lie had not authorised the intervention of the police, t The Judge said that the companies affected had a remedy at law. He then announced the appointment of two accountants of the Auditor-General's Department to take possession of the books and papers of the companies, and to allow officers of the companies to have access to them. William C. Hewitt, New Zealand, a solicitor, now residing in Sydney, was the first witness. He said he was a director of the British National Trust, Ltd., registered at Canberra. He was also agent in Sydney for the British National Investment Trust. These companies carried on business in the former "Daily Telegraph" building in Sydney. His daughter was assisting him. > No Books Kept. Hewitt said he was the sole director of the British National Trust, the capital of which was £1,000,000. Farms and Farmlets, Ltd., which was 'registered in New Zealand, held some of the shares. He believed that the original shares were taken up by J. W. S. McArthur, C. G. Alcorn and T R. McArthur. Cheques had' been passed for payment of the shares. No books had been kept for the British National Trust beyond a minute-book. That was entirely due to his own remissness, but the records necessary to complete the books were in his room, Hewitt hoped. He was also the attorney in Sydney for the Southern British National Trust. This company had been housed in the. Trust building, Sydney, more than two months, but had not yet paid any rent, as'the lease had not been completed. While acting as attorney lie received many thousands of pounds from .applicants for debentures, and also received some' shares and other securities. Cheques Passed. Harold Charles Glasson, secretary of the Investment Executive Trust of New Zealand', and the Southern British National Trust and Wynwood Investments, said that the share capital of the first-named company, which was registered in Auckland amounted to £IOO,OOO, most of which had been called up.. Cheques had been passed for the shares, and. the cheques went back to the persons paying into the company. Mr W. Monahan, K.C. who is assisting the Royal Commissioner, asked witness how many shares were issued and paid for otherwise than in cash. Witness said it would run into thousands. He added: "The capital invested in this company has been reinvested in about two hundred different companies." The Same Directorate. Replying to Mr Monahan's further questions, Glasson said that the Southern British National Trust which was registered in Sydney, carried on the same business as the Investment Executive Trust of New Zealand. It had the same directorate and the same secretary. Not many shares in this company had been paid for in actual cash—there was merely an exchange ot cheques. ' . • , The Judge: What was the basis ol this exchange of cheques? Witness: These people were selling their services to the company. It was for services rendered. The Judge: Is' there any record oi these services? . . Witness: Only in the formation ot the company and the gathering ot statistics. ' , „ ■ Mr Monahan: Statistics of what? Witness: Of various companies throughout the world. Mr Monahan : Who got these shares? Witness: J. W. S. McArthur, Alcorn and several others. "What Did You Get?" Mr Monahan: What did you get for vour services? ' , .... Witness: Five hundred five shilling shares. Among others, was GloverClark, of Auckland. Charles Graham ATcorn was examined regarding the affairs of the Sterling Investments Company and the Alcorn Trower Company Ltd. John William Shaw McArthur, managing director of the Investment Execut'iVe Trust of New Zealand and also of the Southern British National Trust, said that part of the debenture money of the Investment Executive Trust was invested in the debentures of the British National Trust. The Judge: - Why invest debenture money from company A in company B? Witness: To make money out of it Tor the original debenture-holders. They get income from the investment. The Judge: When did theso series of companies start operations. Witness: About three years ago. The inquiry was then adjourned.