MERGER PLANS.

Auckland Star, Volume LXV, Issue 224, 21 September 1934, Page 7

MERGER PLANS.

COMPANY INQUIRY.

TRANSFER ASSETS. Commissioner's Suspicion of Bribery. MR. McARTHUR EXAMINED. (United P.A.—Electric Telegraph-Copyright) (Received 1 p.m.) SYDXEY, this day. The Royal Commission which is inquiring into the activities of 31 companies continued its investigations today. Mr. Justice Halse Rogers presided as Commissioner. Mr. W. W. Monahan, K.C., and Mr. J. B. Collier appeared as counsel assisting the commission, Mr. R. Windeyer, K.C., and Mr. B. Fuller for the Investment Executive Trust of New Zealand, Ltd., and the Southern British National Trust, Ltd., and Dr. F. Louat for three other companies. The examination of Mr. J. W. S. MeArthur was continued when the sitting was resumed. Replying to Mr. Monalian, Mr. McArtliur said that it was now proposed that the Southern British should control the British National Trust, Sterling Investments and Pacific Exploration. Mr. Monalian: Why should Southern British get control? Mr. MeArthur: They are going to take British National Trust debentures now held by Farms and Farmlets, which would then disappear. Mr. MeArthur said he thought Sterling Investments eonld disappear and its asset be put in the British National Trust. It was proposed to eliminate some companies which had completed their usefulness. Replying to the Commissioner, Mr. MeArthur said he desired to obtain control of the Trustees Executors and Agency Company of New Zealand in order to make certain assets available. He proposed to amalgamate that company with his own Trust and to reorganise the amalgamated company with a strong directorate. He also desired to obtain the remaining assets of the Primary Producers' Bank, on which profit of £200,000 could be made. He intended, further, to conduct a branch of the bank for deposits only. He had an idea of giving the preeent shareholders of the bank some interest in the new amalgamated company. Commissioner and Bribery. Referring to a letter dealing with the activities of the "Po. Lab." Association, the Commissioner asked: You don't suggest that the methods mentioned meant anything but bribery? Mr. MeArthur: I can only say that there was no intention of bribing politicians. The Commissioner suggested that if Mr. MeArthur could, before the conclusion o*f the commission's sittings, assist in drawing any inference other than that it was a scheme of bribery to prevent the report to the New Zealand Government getting before Parliament, he should produce evidence to that effect. Mr. MeArthur said that he would do so. The Commissioner said he would need some help in framing the recommendations he had been asked to make. Among other things, he had to protect investors' interests. Dr. Louat: Suppose we are able to put forward some voluntary plan which would eliminate what you may consider to be the evils of the present situation? The- Commissioner: I say now that any such plan must not leave the control of these companies in one man's hands. It may be that in preserving the interests of debenture holders I shall have to make recommendations cutting across the interests of other people. Bonds Taken to Auckland. Mr. H. C. Glasson said' that bonds representing £2300 of Southern British debenture capital had been taken from Sydney to Auckland by Mr. MeArthur and sold there. The proceeds had been paid into Sterling Investment account, but he did not know whether any money had been withdrawn. Almost simultaneously, he admitted, some of the money was undoubtedly going to Miss Smith for the purchase of her holdings. Mr. MeArthur had been paid £800 about that time, but Mr. Glasson did not know whether that also was part of Southern British, money. The money had been made secure for Southern British, which had been given British National Trust debentures.. Various sums had also been paid at different times to Mr. C. G. Alcorn and Mr. MeArthur, the former's drawing being fairly regular. Mr. Monahan: So Mr. Alcorn -was being given Southern British Trust funds for his personal use? Mr. Glasson: He gave security. Problem of Meeting Commitments. Mr. W. C. Hewitt said the improvements to the Trust Building durin" Aug-ust cost £2000, which sum had not yet been paid. There would be more expense for September, and at the end of the year interest would have to be paid on £112,000 worth of Southern British debentures. Mr. Monahan: And British National Trust has nothing? Mr. Yes. Mr. Monahan: So a fresh batch of debentures will have to be issued to meet all this? Mr. Hewitt: That Is about all I can see for it, apart from the money due to us. (Proceeding.)