BUSINESS WAYS.

Auckland Star, Volume LXV, Issue 234, 3 October 1934, Page 7

BUSINESS WAYS.

CRITICAL COMMENT.

Dispute Between Companies Revealed.

COMMISSIONER'S REMARKS. 'United P.A.—Electric Telegraph—Copyrights (Received 2.30 p.m.) SYDNEY, this day. The Royal Commission which is inquiring into the activities of 31 companies continued its investigations to-day.

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.

After Mr. McGhie, appearing for the Mclnnes companies had explained the dispute that had arisen between the Southern British National Trust and V. B. Melnnes (Australia), Ltd., the commissioner remarked that the only importance he attached to the discussion was the light it threw on the business methods employed.

Mr. Monahan: And the hopelessness of getting a balance-sheet. Even on their own statement Mr. Mclnnes admits that he retained commission that was not payable.

Mr. Glasson said that Mr. Mclnnes had been remonstrated .with —Mr. MeArthur having gone so far as to write to him on the subject.

The commissioner remarked that the letter he had received from Queensland required some attention as it might have some bearing on the Mclnnes Company's methods. He added that the letter alleged that members of Mclnnes and Company's Queensland staff had been unable to obtain their salaries for some weeks.

INVESTORS , WELFARE.

Debenture-holders to be

Consulted.

REMODELLING SCHEME,

SYDNEY, October 2

Mr. C. G. Alcorn, recalled, at the hearing of the commission yesterday, said that under the proposed reconstruction scheme he expected to get £20,000, of which he had already received £4000.

The commissioner remarked that, notwithstanding the proposals for representation of the debenture-holders on the boards of the companies it seemed that substantial control would still be in Mr. McArthur's hands.

Mr. Fuller said there were important modifications as to investments and the appointment of auditors, which points covered most of the powers, and the directors appointed by the debentureholders would be virtually in control of the companies.

The commissioner said that if -he reported in the terms he had in mind about the present management —and mismanagement —of these companies, the diversion of assets, and various other matters which had been mentioned in evidence, the debenture-holders might be very loth to entrust the control of their affairs to the people who had it in the past.

Mr. Fuller said that Messrs. McArthur and Alcorn were extremely desirous of getting an expression of opinion by the debenture-holders. A serious position would be created for the debentureholders if the companies were wound up.

The commissioner said that was not by any means beyond doubt. If the value of the Trust Building was anything like that put forward by the principal parties it might be possible to allow the companies gradually to realise their holdings and to carry on until an opportunity presented itself for the sale of the building.

If the value was there they could cany on indefinitely from revenue. He was inclined to take the view that the first question should be the preservation of the assets of the debentureholders, but there might be every security by winding up under certain conditions.

Counsel engaged in the inquiry devoted more than an hour to a general discussion upon intricate items in the balance-sheets and financial statements of the Mclnnes group of companies.

Mr. Mohahan intimated that he had received a letter from Mr. M. Hampson, barrister and solicitor, of New Zealand, who felt his reputation might be affected by something said before the commission and offered to come to Sydney to give evidence.

The commissioner said he would read Mr. Hampson's affidavit to see whether his reputation had been affected, as he did not remember that anything had been said affecting him. However, any persons who thought their reputations were at stake could appear before the commission to clear away any misapprehension concerning themselves.