DEALINGS IN SCRIP.

Auckland Star, Volume XLII, Issue 194, 16 August 1911, Page 6

DEALINGS IN SCRIP.

THE LENNOX BANKB.XJFTCY. MEETING OF CREDITORS. A SEARCHING EXAMINATION. A lir-1 meeting of creditors in the (.-;.i ,j ,ii .lamea tJcott' Lennox, share|.r. mi. ; mk place ai the oiboe of the uiliv..u iilr. W. S. Fisher) this Ujui una. lat j»rillciDul truiliUiro in the i-'.i-' .vie as follows: LJauk of .New bui.a Wales (guaranteed and paid by Juea-r». Boyd), £ll4B U/J; F. Green Vi tin tum-jit ,*. CtioJ 1.3/; 11. E. Mays, , ;l:, || iu ; H. A. Wright. Cititi 17/ li; lj. !Ju»u (L'aeroa), Loo; K. K. Beck E ttiii: \. I'. Casey. £.150; A. Hanna, •Isii: K. W. Honuiunxk, I2T0; 11. 8. l.illi.v. tllU; .Mrs. Knock I Mt. Eden), tljii; I-'. C. lias.-. £lH> td/8: F. Kn.-c-W' .Newmarket), £135 5/. There were 01 iii 1 -mailer erc.litors. The bankrupt, in his Statement to the ii j -I>.-.-. a digest of which was published in ye-lfiday's "Star.'' admitted a de-lii-i.-iuv of i:i. r iM. Debts were owing to him amounting to 125UU, and these had L 1 written down to a sum which, he lhoiL'lir. ought to be available for disIriMil h.ii. His interest in shares lie had r---s-d .it their market values to-day. Ii ,\.is. however, hard tu est mate their \.i! 1,-, .mil if they. only realised what llie-i ."'-l iiini they would be amply suiliVielit to pav lii's eredHors "20/' hi the £. Tin int-iv-ls lie held under the will of li.s uncle .ml his grandfather, totalling £7iiii. are. as explained in .yesterday's i—.ue, virtually wiped oirt. according to bankrupt's statement. a-s they have been il.-l.iled tu trustees and the guarantor of his hunk account. With regard to un--.■i ure.l creditor*, he had placed them at tin- pre —in market value of the shares tu .vhich they were entitled. ITis. personal liv.mjj..debts \iuty came to £OO. THE CAUSE OF FAILURE. • Bankrupt, in his statement to the assignee, said he ascribed his losses to the following facts:—(l| Losses due to the heavy fall in Waihi shares causing n -lump in various mining companies and interests which I had purchased in anticipation of making a considerable profit: 1J 1 my effort to retrieve myself in celling -1 ha res, for forward delivery in the belief that the slump caused by the Waihi would afTce* such shares." Bankrupt's liabilities were as follows: —Secured credtors. £lO5 (estimated v.ilire of security. £IOO. Waving a deficiency of Ef>s) : unsecured creditors, £.")o(H» 2/-i. Fallowing, are the. assets: ires in mining companies. £-154 10/10: seat in Stock Exchange. £500; book de'ds. E-2:"5i»0. estimated to produce £873 R/S: cash in hand. £l2O 0/10. Total assets. £1!'.")0 0/4, leaving a deficiency of £3."i3(i ?/. STOCK EXCHANGE ACTION. When the proceedings, opened before the OiUcial Assignee this morning, those present were: Messrs. O. H.Boyd, F. Kueebonc, H. is Gillies, E. K. Beck, 1). K. Kevell, D. P. Casey (Mr. Gundy), J. ii. Lindsay (Mr. Tunics), W. J. Rogerson I Mr. Stanton), L. Wallis (Mr. Wyatt), .A Manila. 15. Woodhouse, G. V. Millars, '!. li. !)<' Itenzy, F. Green (Mr. Gould), II A. ,W right,'.S. C. Leary, H. Munro Clark, W. Cray. • Mr. A. Ilaiuia appeared for bankrupt.' Tb« Assignee (Mr. Fislter) said the position, fnit. shortly,'-was" that if anything like tb" values could be realised the estate would pay ti/8 in the £. Ha should be very p.'eased, indeed, if he were able to \uy them 6/S. In regard to the seat on tlui Stock Exchange,, he proposed to have searching inquiry made. The Slock Exchange had forfeited the seat, and sohl'it. and used .the proceeds to pay some members of the exchange who were creditors of Lennox's, and so placed them in the position of preferential creditors. It seemed to him an extraordinary thing ■for. the Exchange to have done, and ho would inquire further into this matter. The'book debts totalled £2500; bank rupt had expected these to produce £ 575; but he found many of them were disputed. The shares he (the Assignee) -proposed to place in the, hands of a broker to dispose of. THE BANKRUPT .CROSS-EXAMINED.

.lames .Scott Lennox was then sworn, and cross-examined respecting his statement.

Mr. Gould: You attribute your bankruptcy to the slump in W-ailiis. Were you not in difficulties long before that! —No; not kmg. When did the slump in, start* ■ —l2 months ago. IS" it hot a - fact that - as long'ago as starch, 1010. you received a cheque of ai'iH from Mr Green for the purchase of 100 Talisman shares?— Yes, I did. Now, why is it, if you only got into difficulties 12 months ago, you never pur(based those shares in 'l9lo?—They were purchased. Then why is the-transaction not shown ill tli<; company's register?—lt, should 'liuve Wn. The transfer should have gone through in the ordinary course.

JJp. yon moan that the transfer was mad.-'.' lin searching the -company's register mi behalf uf Mr Green, I can .lind-itlisohitaly no-traco of .such, a transaction'.' — 1 vaimot say. If they were ..not rciriatered it was the JEault of my *-ch-rk. Mr Ihi una: -lb is- tho -duty of your clerk to attend to tin- registering of a transfer? —Yes. yiv f.'ould: Has Mr Green not time lime asked yoft .about „tb.esc shares? .—'No; lii' has not. Afterwnrd»?j>n the 15th of March this "year, MVTiri'ni sold,Th?dugh you. 200 .'-TilHisman shares, the scrip actually bqiing pla-ced in vour hands? —Yes, about thai date.

Mr. Could:- Tho date has already been sworn to in the petition. Mr. 'Wanna: There' 'are a'g'ood many things sivoru. to,i;i the petition that I ani gojng to. have a word to say about later on.' Mr. noti'd: Yon also purported to sell -oh Mr. (rreen-'s-instructions, thp.-other \ 40ft Talisman- sha'res veil -held, making 300 shares altogether?— Yes; I'cfid soli ' :>Qfl altWgeflfer.""' "'..""' ' " Then why does the register again show ' no r.'conl of the transfer of'these 100 - chares?—l cannot say. I leave the roistering of transfers to my clerks. WHAT IS CUSTOMARY? The Assignee: Is it 'customary for rtiari'lirnkers to leave such matters to their clerks?—We must; we haven/t time. ""We are three hours a day at the - calls alone. On the sale of these shares for Mr. » Green, over .£750 was left on vour hands?— Yes. ' •" T . l jr n ilr - Green gave vou instructions to pureha'sc "atlier no in--rtpuetUroß. .iuc.. ,Green. drejv some -.Snimey a S ainsf.ifat-the'time. How do you explain • that sub=eqaent not the eompany^ftc4TO&~ BiV;' 8 iV;' inv • J?** »m. not "oU- fcUs£fx»J £ e £ - Mr."Haniia's ,»ti uvf *£, -.|

Mr. Gould: Had we not better have these books here, Mr. Assignee? The Assignee: It will involve considerable delay. Mr. Gould: There arc matters in connection with this bankruptcy which require the very fullest investigation. The petition was opposed before the Supreme Court Registrar, and the Registrar stated, in giving his judgment, that certain matters required further investigation. Mr. llanna: It is quite a common thing for brokers to pay dividends with their cheques. Mr. (iould: To return to these 100 Talisman shares: Why were the other 200, sold in .March this year, registered, and the other 100 not registered?—l cannot say; my books will probably say. Mrs. Knock gave you £157 in April last for the purchase of shares: why have only L'3o worth been bought?—l I could only get £3O worth at the time, and intended to buy the others later. ! Mr. Tunks: On 12th March, 1910, you received £4O from another client for the purchase of New Sylvias?— Yes. ■Were they purchased?—l cannot say whether they were unless I have my books, but I am almost certain they were. These shares have never been delivered '! — No. Can you say what has become of them? —There arc 2.70 shares on the register now, according to my statement, but I cannot say whose they are. Mr Tunks then cross-examined bankrupt about the £2OO which he was entitled to under his uncle's will, ami wlich the trustee had debited against him because of his failure to account for certain shares. There was also the sum of t'.'stH), due to him under his grandfather's will, which wj>9 absorbed in paying the guarantor of his banking account, lie also examined bankrupt with regard to his banking account, eliciting the information that Lennox knew he was overdrawn when he approached a creditor for further assistance. DEALING IN VVAIHIS. Mr Grundy: In March last year you bought Waihis in London and sold them here. Why?— Because 1 could make money. You bought 50 shares from Mr Casey .in the Waihi G.M. Co. How is it that you have not got those in your assets? — 1 have not got them. Then why have you not shown them in your assets'.' —hey were lent to me by Mr Casey, nnd 1 paid him interest on them. 1 have not been able to return them. Mr Stanton: In every case that you received money for the purchase ot shares, did you spend the money as directed? —In every case except that of Mrs. Knock and Mr. A. L. Harris. You ■cannot always buy when you want them, or in the parcels you want. And do y.ou not acquaint your client of the delay?— Not unless they inquire. So that a client may go for months thinking he possesses shares, and be quite mistaken in his belief? —He might. You bought Waihis for Mr Bogerson?j —Yes. And what did you do then?—-I borrowed them and sold them, paying him interest on the money. So that you sold Mr Rogerson's shares and put the money in your pocket? — You cannot earmark everything. Did you tell Mr Rogerson that you had sold his shares?—He lent them to me. The Assignee: Do you mean to say that hawkers sell shares .AUd^U'lki* 1 . money in their pockets "in t"rwS"ttay?'< Mr. Hanna: It Is just the same, as a loan of money.

The Assignee: Was Mr. Bogerson aware of what you were doing?—l was paying him interest «t the rate of six pence per share. Mr. Stanton: Yes, on the shares, but not oh the proceeds. Mr. Hanna: Well, what would he pay sixpence per share for the loan of them for, if not to use them? Mr. Stanton: Y'ou bought 500 shares for Mr. L. D. Harris?— Yes, six or seven years ago. Did you ever give them to him?-—1 offered* them to him several times. 1 had to protect the shares by paying calls. You had them in 1000. What have you done with them since? —They have been used in the ordinary course of business.

. Did it not occur to yon that-.vou had no right to use other people's shares?— I was not aware that the shares were ear-marked; I had Victoria shares of my own.

Ami you used them without knowing that they wero Harris's? —Yes. Just the same as you did with Mr. Rogerson's?—No. that was a different matter. I bought again in London for Mr. Rogerson? . Then where are the. same l Sis..otbeis in £he prdiiiary course of business.

Mr. Wyatt: Can you tell me whether you still' hold 200 New Waitaia shares for Mr. L. Wallis? We have several times received from you - a request for the payment of calls?"—I would have to refer to my books before I could reply. Mr. Gould: When you received money for the.piiccbase did you treat the money as trust money ?—No. I simply paid it into the office account.

NO TRUST ACCOUNT. •You kept no trust account?—No, although T think it might have been better had I done so. Mr. (iillies: On March 11. I instructed you to buy 100 Taranaki petroleums. Did you buy them?—l did. Then why did you tell me in the street that you didn't? —I did not say anything of the sort. The Assignee: And were these shares sold Mr." Gillies: You actually sold my shaves?— Yes.

And used the proceeds?— Yes. The assignee said he proposed proceeding with the realisation of the estate. The seat on the Stock Exchange and the matter of its disposition he would inquire into very fully. He would also proceed with the collection of the book debts, though he believed many of these would be disputed.

Mr. Gould: T presume the bankrupt will produce his books at the next meeting, so that we may have the fullest information regarding these share transactions.

. On the motion of Messrs. GTeen and Hanna it was. agreed to hold an adjourned meeting, at which the debtor should be fully examined regarding share transactions. The meeting then adjoirrned.