COMPANY AFFAIRS

Auckland Star, Volume LXVII, Issue 185, 6 August 1936, Page 15

COMPANY AFFAIRS

McARTHUR on trial.

CROWN CASE CONCLUDING.

ACCOUNTANT'S EVIDENCE?" ■ ( (By Telegraph.—Press Association.) WELLINGTON, Wednesday. The trial of John William Shaw McArthur, company director, was continued in the Supreme Court to-day. Accused is charged on six counts alleging falsity in connection with prospectuses and reports concerning the Investment Execu. tive Trust of New Zealand, Limited.

The case is being heard before the act-ing-Chief Justice, Sir John Reed. Mr. V.°R. 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 McArthur, and Dr. F. Louat, a° member of the New South Wales Bar, is assisting the defence. The Crown ease "will probably conclude on Friday and the defence will proceed well into next week. A statement that a cabled ■ message had been received by the Public Trustee subject to confirmation, advising him of the sale of the "Daily Telegraph" Building, Sydney, was made at yesterdav's session. The acquisition of the building by McArthur interests has frequently been mentioned in the pro-, ceedings. , r>,r It was stated to-day by Mr. O'Leary that this was the first time a charge of the kind preferred against McArthur had been laid in New Zealand. His Honor said there were Empire cases— those of Lord Kylsant, the shipowner, and the recent pepper case. Continuing his evidence, Arthur J. M. Anderson, accountant in the Public Trust Office, said under cross-examina-tion that he had specialised in dealing with the particular group of companies concerned in the case. Mr. O'Leary: Have you done anything else in the past 12 months?

Witness: Oh, yes. First Charge in New Zealand,

He said it was correct that, out of all the investigations, a charge of issuing a false prospectus was issued 14 months after the inspectors started their inquiry. . . . Mr. O'Leary: Have you ever heard of that charge being preferred against anyone else in New Zealand? Witness: No. 'j Witness said he swore three informations against McArthur, at the request of the late Mr. P. S; K. Macassey, for theft of £1075 from Sterling Investments. The magistrate dismissed the charges. . Mr. O'Leary: I put it to you that the informations were laid to prejudice McArthur in this trial. 'Witness: Not so far as I am concerned. You say you were ordered to lay the informations? —No, I was asked to, and agreed. Mr. Meredith submitted that Mr. O'Leary was not entitled to make such comment to this witness. His Honor said it had absolutely nothing to do with the case. The jury had not to decide on what steps were taken, but whether the reports or prospectus concerned in the charge were true or false. JSVi'-S? Mr. O'Leary: If I can show motive? His Honor: It does riot matter. Supposing a case were brought to Court actuated entirely by spite. It would not matter if it were proved. I do not think it could be suggested that Mr. Macassey had the informations laid just for spite. Mr. O'Leary (to witness): The rear sting of the indictment is that he did not diversify the investments? Witness: Yes. His Honor said this was not the charge, but that the representations were such as to leave an impression that there was a diversification of investments. "Daily Telegraph" Building. To Mr. O'Leary, witness said it was correct that the British National Investment Trust owned the "Daily Telegraph" Building in Sydney. The British National Trust owned the ordinary shares of the British National Investment Trust and, in effect, the building, subject to a £55,000 mortgage and the preference shares the latter had borrowed from the Investment Executive Trust, so that the last named really had to look to the "Daily Telegraph" Building for its security. The building was now owned, by a process of transfer, by the Australian company, the South British National Trust.

Witness said that it was correct that what the trust debenture-holders would get depended on what the building rented. The subsequent value given the building at the commission proceedings indicated that it was a good speculation. The Supreme Court of New South Wales had placed a reserve on it of £273,000. The commissioner had said £300,000 was too low a figure and £400,000 too high. The Valuer-General valued the land alone at £93,000. Since its purchase £102,000 had been spent on the building, the mortgage being increased to £100,000.

To Mr. Evans-Scott witness said a cablegram lad been received by the Public Trustee that the building had been sold, .i" : Objection By Counsel. Mr. O'Leary objected to the price being asked:_; ; . He said the sale was not at present definite or capable of proof. Confirmation of the sale had to be received. It might be possible to give the exact position before the case closed. Witness said the net proceeds of a sale of the building would go twothirds to the Investment Executive Trust and one-third to the South British National Trust. Re-examined by Mr. O'Leary, witness said he was aware that the Guardian Trust was appointed manager of the estate of Miss Smith, a wealthy woman, who invested £28,00® in the Investment Executive Trust. He knew the company started an action for the return of Miss Smith's money, alleging she was an aged and infirm person, so that to pay her the Investment Executive Trust had to provide nearly £30,000, either in cash or securities, early in 1934. John Leslie Griffin, public accountant, Wellington, one of the four inspectors appointed under the Companies Investigation Act, was called shortly before the hearing was adjourned.