FEDERAL BANK OF AUSTRALIA.

Auckland Star, Volume XXIV, Issue 241, 11 October 1893, Page 8

FEDERAL BANK OF AUSTRALIA.

REPORT BY MR ANDREW

LYELL,

ADVANCES TO DIRECTORS,

Mr-Andrew Lyell has prepared a report on the aflairs of tho Federal Bank of Australia, Limited (in liquidation), for tho information of the creditors and shareholders. Tho reporb states tho total bills rocoivablo bold by, and other advancos owing to, tho hank on Jan. 28 amounted to .2,142,710. Of this £400,000 represented balances owing of advancos mado by thelocal directors ab Sydnoy and Adelaide, arid £246,650 represented balances owing of advances mide through tho suburban branches of tho bunk.

Dealing with the assumption that tho advances had been improperly made to directors, and upon which losses had either accrued, or were likely to accruo, the report states that) tho directors to whom tuch advances were separately made were Messrs James Munro, William M'Lsan, John Kobb and John Whittingham. The balances owing on January 28, 1893, in respect to such advances, aggregated £161,829. Ab tho same time Edward Lathan Whittingham, M'Lean, and Munro, wero jointly liable for an aggregate of £38,SU, moneys which bad been advanced to the firms of which they woro members, or as guarantors for advances to other debtors. No direct advances woro

made to any of the abovenamed directors which were nob covered by aecurities, which, valued afc the time, lefb a considerable margin in favour cf the bank. Only 16,094 oub of 30,367 shares held by the directors were included among the aecurities lodged againsb the advances. He cannot see how it could, with fairness to those responsible for bhe management of the bank at thab time, be assumed that these advances were either improperly made or without due care or caution, even though considerable losses musb accrue to the bank from these advances in consequence of the enormous shrinkage in the values of the securities held.

As to whether tho director)] and management exercised sufficienb care in making the more important advances outside the directors, ho found that the principal advances were the Real Estate Bank, £116,293; United Property Company, Limited, £38,400; Queen Investment Company, £31,847 ; and Union Finance Company, £30,085. These were fairly secured ab the time of advance of principal, tho advances to privato firms mosb noticeable were to Munro and Baillieu, Donald Munro, W. L. Bailiiou and A. G. Hall, £184,089, made ab different bimes. The firm's position ab the timo showed a good balance to credit in the cubo of advances, £38,702 to Strathdarr station, belonging partly to Mr James Munro, the bank had a lien on his share in this and another station, which cosb him £20,000. The station boing put up to auction during Mr Munro's absence in England the bank purchased ib in support of securities if below a certain price. This had been done, and ho found the station a valuable one, which would give the bank its money back in full. The remainder of the reporb treats of fche smaller individual advances.—" Sydney Telegraph."