COMPANY LIQUIDATION.

Auckland Star, Volume LII, Issue 215, 9 September 1921, Page 6

COMPANY LIQUIDATION.

BANK AS CREDITOR. ALLEGED DEHCIT OF £68,000. AFTER THREE YEARS' TRADING. Liabilities, £7J5,000; assets, £7000. These were the outstanding allegations against the Oversea Sales Agency, Ltd., 0, Commerce Street, Auckland, carrying on business as merchants (in liquidation), which allegations the Bank of New South Wales, Auckland and elsewhere, made in a petition for the compulsory winding up of the Sales Agency, the matter coming before Mr. Justice Adams at the Supreme Court to-day. Mr. R. P. Towle represented the bank, the petitioning creditor, Mr. Ostler and Mr. West appeared on behalf of Robert Frederick Wilson, managing director of. the Sales Agency and one of the contributories of the company, and Mr. Hagnall for 11. C. Tewsley, accountant, the liquidator. The petition alleged that the nominal capital of the company was £30,000, divided into 30,000 shares of £1 each, of which 15,000 shares were allotted on the formation of the company as fully paid up, and the balance of 15,000 were subscrilied for on the footing that the same should be paid for in cash. The amount of capital credited or paid up thereon was unknown to the petitioner, as permission to search the slnire register, it was alleged, was refused by the liquidator, and a search at the office of the registrar of companies disclosed no information. Jt was further alleged that tire company was indebted to the bank in the stun of £37,232 4/ in respect of bills of exchange accepted by the companj", and which had been dishonoured up to August 20, 1921. The only two shareholders of the company, it was alleged, were Robert Frederick Wilson, formerly of Auckland, merchant, and Daisy Wilson, his wife. These two shareholders at Sydney held a meeting on August 10, 1920, and purported to pass a resolution resolving that the Oversea. Sales Agency, Limited, be wound up voluntarily as from that date, and appointing Mr. H. C. Tewsley, Auckland, as liquidator at a remuneration of £5 per cent on the amount of the I assets and liabilities. The petition further alleged that the liabilities exceeded £72.000 (apart from capital), of which liabilities the bank was, as stated, creditor to the extent of £37,232 4/, and also held accepted bills to mature before August 20, 1921, amounting to £32,884 4/8. It was contended that a voluntary winding up would prejudice the interest of creditors. The company had become heavily involved in a very short time, and, it was alleged, that no less than £05,000 would be lost by the creditors, and that after trading for a little over three years. There was an allegation that the loss of large sums of money by the company could only have been occasioned by the recklessness and negligence of the directors and officials of the company, and an utter disregard of the duties and obligations upon them in the conduct of the company's affairs, and that the whole circumstances required [investigation by an oflicial liquidator to I ascertain whether they or any of them had been guilty of negligence or of misfeasance in the administration of the company's affairs. It was alleged that the matter should be submitted to the [ closest scrutiny and investigution by an j impartial investigator. I "Transactions between the company and a company in Sydney, called the Oversea Sales Agency (Australia), Ltd.," it was further alleged, "indicate that there has been a scheme in operation to defraud the bank by procuring it to discount drafts drawn on the Oversea Sales Agency, Limited, by the Oversea Sales Agency (Australia), Ltd., and purporting to have been drawn in pursuance of bona-fide sales of goods by the former company to the latter company, and the bank was induced to discount various drafts by false representations that goods that heon sold and shipped, and the OverI soa Sales Agency, Ltd., aided in such false representations in accepting such drafts on presentation/ Mr. Ostler asked for an adjournment to enable the production of affidavits from Sydney in answer to the grave allegations of fraud. Mr. Bagnall said that Mr. Tewsley had been asked by a solicitor if he would accept the position of liquidator. lie agreed, but no arrangement was made as (o remuneration. The next information he received was notice of his appointment terms of remuneration. Pie was suspicious, and inquired into the position of the company, which, it was alleged, he found was anything but satisfactory, lie found a state of things such as lie personally would have nothing to do willi. and he took the first opportunity of intimating to the company in Sydney that he would have nothing whatever to I <lo with the liquidation, and he resigned. It was Mr. Tewalcy's view that the ease w:is certainly one in which the winding up should be under the supervision of I the Court. During a lpnpthv discussion on tliP question of an adjournment Mr. West •~'ii:l lie was not in a position to arjruo the merits. There might be a defence Jon the merits. The petition waa eni ti.-clv based on bills. llm Honor: It i« entirely based on a very Jarpe overdraft involving thousands of nouml-s. Mr. West said the bank advanced the overdraft to the -Australasian Company. The overdraft in New Zealand was not concerned in the present action, which was on bills accepted by the New Zealand company. : Mr. Tnwle opposed any .adjournment, I and said it might prejudice the creditors j His Honor said that if for the purnose* of the petition only the charge-; of fraud were abandoned, an order would be made on tlie alleged ground that the company could not pny its debts, otherwise there would probably be an adjournment. Mr. Towle: The charges will have to be investigated in connection with the winding up. Hie Honor: That ie a different matter. Mr. Towle: I am prepared to accept nn order on the one ground. I do not think there is any opposition to the petition. Mr. West: We arc not in a position to oppose. Our application is for an adjournment. Mr. Towle ,*aid the allegation that the company could not pay ite debts was abundantly proved. The assets were a mere drop in the bucket. His Honor: You will be fortunate if you even find a drop in. the bucket. An order for the winding up of the company was accordingly made on the one ground that it could not pay its debts, the judge stating that the withdrawal of the charges of fraud were only for the purpose., of the petition, and were not an admission that therei was no fraud. i