OIL COMPANY'S AFFAIRS.

Auckland Star, Volume LXIII, Issue 238, 7 October 1932, Page 5

OIL COMPANY'S AFFAIRS.

UNDERWRITING OF SHARES. CONTENTS OF PROSPECTUS. PROMOTER PROSECUTED. The hearing of the charges brought by Royston Noel Sedman Cliisholm, public accountant, against Harry Clinton McElwain, company promoter, was continued before Mr. F. K. Hunt, S.M., this morning. The charges against McElwain are that lie concurred in the publishing of a prospectus concerning the Speedwell Oil Company (N.Z.), Ltd., of which he was a promoter, and which prospectus he knew to be false in material particulars, with intent to induce persons tc become shareholders in the company. This morning evidence was given by Valentine Weymouth Stocker, manager of the Wilton Furnace and Coal Company. His evidence concerned agreements which lie had entered into with one Burleigh. By one agreement made in December, 1029. witness agreed to underwrite 0000 shares in the company. He was to procure applications for the shares not later than February 28, 1930, failing which he was to lodge the application money himself. The date of completing the lodging of the applications was, by a second agreement, extended to March 7, 1930, but witness had lodged no money, and the selling of the shares he handed over to Burleigh. Burleigh, in an agreement, indemnified witness against any liability incurred in the underwriting of the shares. Counsel for McElwain objected to the declaration signed by the witness Stocker being produced unless Stocker was cross-examined regarding the agreement between himself and Burleigh. "My friend," lie saifl, "is trying to get information from the witness which would not otherwise be available to him. He is seeking information to assist him in his civil action against the directors. I submit that the evidence is irrelevant."

Counsel for Chisholm, the Informant: I don't want to get evidence for the purpose my friend declares. I have all the information I require from the books. Mr. Hunt: What I have to decide in this case is whether McElwain when he put out the prospectus knew the company was a " dud." Cross-examined by counsel for McEhvain, witness said his agreements were genuine and not subterfuges. He did not think McElwain knew anything of the agreements between witness and Burleigh. Botli the company and witness treated the underwriting contract seriously. ('lhe hearing is proceeding.)