THE LATEST.

Auckland Star, Volume XXV, Issue 139, 12 June 1894, Page 2

THE LATEST.

Friday, April 27, 4 p.m. The examination of Mr Moore, one of the auditors, was resumed and concluded today. • He admitted that the arrangements between the Loan Company and the Land Company were altered from time to time.to suit the convenience of certain individuals. If debenture interest had not been paid for by the Loan Company on the Land Company's debentures, there would have been a greatly reduced dividend. In effect the Loan Company lent the £15,000 out of which the dividend was declared by the Land Company. ; • • Mr. „W. P. Peat, the other auditor, generally corroborated the statements of the previous witness. The auditors asked for information as to the working accounts in January, 1892. The manager promised to get ib from Ausbralia. (Details of working accounts produced for 1891.) Was never shown. Did nob know ib was in Paul's possession ab the time ho asked for information. When he complained of the Loan Company's shares in the Land Company appearing under the general heading " Current Account," Mr Paul said it should appear under a separate heading nexb year. He said the same again the following year. The auditors did not think it necessary to differ from the view of the directors in regard to this account. Judge Williams : 1 thought it was the duty of auditors to protect the shareholders against the directors. Witness : That is so. The auditors were satisfied with the promise that it should appear under a separate heading. Judge Williams : You had so much confidence in the directors that you did not wish to tempt the shareholders to lose their confidence in them.

His Lordship quoted from a statement by Sir James Ferguson, that the directors "could riot always play their cards with the faces up," bub trusting to the confidence of the shareholders, mußb do what seemed expedient in the general interest. Witness continued : Never heard of reports by Larkworthy and Cooke. Never gob any reports of unproductive capital, though they frequently asked for' them. Never knew that Paul had such statements in his possession. Never knew that when tho Woolerina estate was not paying it was credited with having earned £14,000. Witness explained the item of £114,000, expenses of floating £550,000 debentures by JJaron Shroder, which was merged under a general heading as an asset. Shroder floated the debentures ab £90 per £100, and paid the Loan Company £85 10s neb. If the public had known this, the conversion echemo would have broken down. It was to avoid this that the item was merged in assets. Judge Williams said tho questions to be decided in the evidence were (1) the debenture issue to 1892, (2) the debenture issue of 1892, (3) the non-disclosure of information, (4) ;the balance-sheet not containing the information which it ought to have contained, (5) the suggestion thab tho transaction between the Loan Company and the Land Company was not in the interests of the Loan Company and ought nob to have been entered into. MR PAUL RE-EXAMINED. Mr Paul, re - examined, said he had carried the £28,000 to profit and loes subject to approval by the directors. The setting i this amount aside was done in consequence of telegrams from the colonial branches. Judgo Williams : If it were said that the directors were paying dividends out of capital, I do not see that you have answered that. Witness: With regard to not supplying the progress reports to the auditors, it was thought that the item. in the annual roports from tho colonial branches would give them more reliable information. The auditors could have seen the reports if they desired. . Judge Williams: Bub they did nob kndw you had them, and you never told them. Why not pub the documents before them?

Mr Paul: Because they were private reports to the directors. . Judge Williams : The fact ia they told too much.

Witness : The £156,000 deficit was nob written off because ib was a contingent loss.

Judgo Williams: I understand you would nob write off anything unless your security was absolutely- gone- and the debtor was dead and buried or bankrupt. There was always a chance' of something turning up, you know. Witness: The statements were approved by the directors. The examination of Mr Paul is proceeding as the mail closet). Judge Williams has intimated that ho will deliver an ad interim judgment on Monday.