McARTHUR TRIAL.

Auckland Star, Volume LXVII, Issue 184, 5 August 1936, Page 7

McARTHUR TRIAL.

COMPANY AFFAIRS.

THIRD DAY OF HEARING

ALLEGED FALSE REPORTS.

(Uy Telegraph.—Press Association.)

WELLINGTON, this day.

The trial of John William Shaw McArthur, company director, on six charges alleging falsity of reports and prospectuses in connection with the Investment Executive Trust of New Zealand Ltd., entered the third day to-day. Mr. Justice Reed is presiding.

Mr. V- P. Meredith, Crown Prosecutor, of Auckland, with Mr. Evans-Scott, is appearing for the Crown. Mr. H. F. O'Leary, K.C., with Mr. R. E. Tripe, is appearing for MeArtliur. Dr. F. Louat, a member of the New South Wales Bar, is assisting the defence.

I Madge Gregory, typist in the Wellington Public Trust Office, said, that for I about seven years from 1927 she was ! employed by accused as his stenographer, j She did secretarial work for him as an employee of tiie Investment Executive ! Trust, the operations of which, she, thought, were controlled by McArtliur. The drafts of booklets entitled, "Increasing Your Income" and "Insuring Investments" were typed by her at McArtliur's dictation. The first prospectus of the Investment Executive Trust was also typed by her at McArthur's dictation, except for the memorandum of association. Mr. O'Leary suggested to witness that, as she liad been accused's stenographer, she had been probably very useful to the Public Trustee in her new employment. Witness: I think they knew all tlioy wanted to know before I went there. She added that the inspectors had been at work. Evidence of Investor. William Edwin Kcdstone, of Wellington, retired insurance agent, said he had invested considerable sums in the Investment Executive Trust. What had interested him most was that not more than j 10 per cent of the debenture capital was i to be invested in any one security. Witness gave details of debentures in the ; company taken lip by him at different ! times. For some of the debentures, lie j said, lie handed over, shares he had in the ! Bank of New Zealand and other com- j panics.

Mr. Evans-Scott asked witness if ho would have subscribed had he known that approximately one-third of the capital of the company at December 31, 1932, was invested in two associated companies. Witness: Certainly not. .Harry Edwin Dowdy, of Wellington, said he was given the publications, "Insuring Investments" and "Increasing Your Income." The expert management and spread of risk by diversification of .securities appealed to him, and he invested. He resigned his post as secretary to the Levy Estate and A. Levy, Limited, to act as a selling agent for the trust. He was impressed with the statement that the trust had investments in such concerns as Canadian Pacific Railways, British South Africa, Limited, I and others. McArtliur assured him in October that the trust had only .18 per cent of capital invested in interlocking companies.

Arthur J. M. Anderson. accountant in the Public Trust Office, said tb.it in the British companies mentioned in a statement issued by the trust it had I £11)01 invested, made up of Bank of England shares, £331; London County Council debentures, £180; Lloyds Bank, £140; British South Africa Company,' £33; Canadian Pacific Railways. £102; ! Lever Brothers, Limited, £122; Dunlop j Rubber. £222; International Nickel Company of Canada, £11S; Home and Colo- ' nial Stores, Limited. £174; Imperial! Chemicals, Limited, £110; and J. and ! E. Coats, £118. j Protest by Counsel, \ Mr. O'Leary objected that he had evidence that, # in 1932, the trust had £20,000 in companies registered in Eno-. •and. The way the C'rown put the posl- . tion was a gross mis-statement". i \\ itness said these were companies which had English registers only. | The hearing was adjourned until tomorrow, bail being renewed for the ni'dit when the prosecution .\\m resumed' to-day the Crown had still so niirh! evidence to call that it could not say,' when it would be completed. " 1