MORE INCIDENTS OF THE LAND BOOM.

Press, Volume XLVI, Issue 7262, 23 January 1889, Page 3

MORE INCIDENTS OF THE LAND BOOM.

MELBOURNE, January 8.

Some extraordinary revelations, exhibiting still further the, ; peculiar methods adopted in connection with the land boom, have been made in -connection with the Royal Standard Investment Company, and they have an increased interest for New Zealand readers, owing to the fact that their exposure is largely due to Mr W. J. M. Larnach. The revelations came to light at a meeting of the shareholders of the Company which was held on Friday last, at the offices of Messrs Bunting and Wright, Elizabeth street. A peculiar feature in connection with the meeting was that the Argus reporter was refused admission, though other Press representatives were admitted. The Argus, however, got a full report, principally with Mr Larnach's assistance. The Royal Standard Investment Company 'was floated in July last for the purpose of purchasing and re-selling landed property. It did purchase largely, but has not been able to re-sell in consequence of the failure of the boom. Its called up capital is £100,000, of which oyer .£BOOO is overdue, and £25,000 is due on January 31st. The properties purchased by the Company were of the total cost of £348,954. Messrs Ranting and Wright, in whose offices the meeting was held, were the managers of the Company, and they floated it. Mr Bunting, who is the Managing Director, was in the chair, and when he had moved the adoption of the report, from which the above facts are taken, Mr Larnach, who was one of the Directors, addressed the meeting. Mr Larnach said that as his name appeared in the report, and he disagreed with his co-Directors in what had been done, he wished to inform the shareholders exactly how he came to be connected with the Company,'and what his action had been since he had been a Director. He made a visit to Melbourne from Dunedin, New Zealand, where he resided in April last, and he determined to take up his residence here. He returned to New Zealand for the purpose of making the necessary arrangements for his departure from that colony, but before leaving Melbourne he was induced to go into several investments, including the Royal Standard Investment Company. He applied for a good many shares in the Company, and on the day that he left for New Zealand he consented to croon the Board of Directors. He had intended returning to Melbourne in the course of a few weeks, but through illness in his family he was detained in New Zealand three months longer than he had anticipated. He did not get back to Melbourne until the Cup week. Soon after his arrival he communicated with Mr Bunting and his co-directors, with a view of having.,a meeting of the Board, so that he could learn what had been done in connection with the Company which had been floated in his absence. He applied to Mr Ranting several times toy have a meeting, but that gentleman always said there was nothing to call a meeting for. In December, being very anxious to know the position of the Company's affairs, he wrote a formal letter, asking that a meeting should be called. The result was that one was held on the 22nd of December. 'Jhat .was the first meeting he was able to be present at and he was not only surprised but astounded at what had been done during his absence. He discovered that the Company had been floated in the beginning of July, it was registered on the sth, and on the 6th a meeting of Directors was held, at which Messrs W. J. Bunting, the Managing Director, J. Reid, J. H. White, and A. Beaver were. present. At this meeting properties to the value of £330,000 were taken over in the Company's name, and among these properties were 768 acres owned by two Companies, which were in the same office as the Royal Standard, and were also managed by Messrs Ranting and Wright. [Loud groans.] 'I hese '* sister" Companies were the Investment Company of Victoria and the Federal Land Company. The properties, including the 768 acres mentioned, were transferred to the Royal Standard Company at most excessive prices, the old Companies making a profit of at least fifty guineas an acre at the expense of the new Company. (Cries of "Shame" and uproar.) He found that his co-directors were either directly or indirectly interested in these vendor Companies. He also found that some of them had on that date sold properties of their own to the Standard, as well as Mr Wright, the partner of Mr Bunting the Managing Director. (Renewed groans.) The properties which were sold by Mr Wright, and which Mr Ranting admitted having an. interest in, were at prices aggregating over j £50,000. There was another property trans- j ferred to the Company at £10,334, which Mr Bunting said his partner had an interest in with Mr W. L. Jack, of Messrs T. Jaques, Martifa and Co., Limited. There were other large purchases made on behalf of the new Company on that day which required explanation. He at once saw that the position occupied by his co-directors as vendors was inconsistent with their duty to the shareholders of the Company, and he intimated to them that he could not agree to what had been done. He was simply appalled at the revelations which were made to him at the meeting and therefore entered a protest in the rough minute book, declining to acknowledge any purchases from affiliated Companies in which the Directors or Messrs Ranting j and Wright Were concerned, unless they were sanctioned by a general meeting of the shareholders. Being anxious to judge of the value of the properties for h mself he visited one of them at Ferntree Gully, which had been bought at £160 per acre, and he would say that, in his opinion, it was not worth more than £20 an acre. When he told this to his brother Directors he was informed that he knew' nothing about the value of property. His disposition prompted him to immediately resign his seat on the Board, but after mature consideration he felt that it was due to the shareholders that he should at any rate keep his seat until he met them face to face. (Loud cheers.) Having now met them at toe first general meeting, and placed before them what information he had been able to gather, he would not be sorry to be relieved of bis trust; at the same time he was willing to act for them in any way they thought was to their interest. The present balance-sheet he had no faith in, and he had dissented from it before it was issued The action of his he could only characterise as monstrous—(hear, hear}— j and diabolical, and it -was to -his sorrow j that he had ever been connected. (Loud j cheers.) .' '. • / Mr JLarnach'a speech was followed by statements by several shareholders, who

had attempted, but failed, to obtain information about the affairs of the Company from Messrs Bunting and Wright. The Chairman was also severely questioned, and he admitted the truth of Mr Larnach's statements. . One property at Campbellfield, purchased at a cost of .£220,000, was sold by the Federal Land Company and the Investment Company. - The Royal Standard Company- had no banking account, Messrs Bunting and Wright acting as its bankers. It also transpired that bunting and Wright received no less a sum than .£SOOO for floating the Company, being commission at the rate of Is per share. Eventually motions were proposed asking the Directors to withdraw the balance sheet, and arrange for the circulation of all the sales to the Company and also of appointing a Committee of Investigation, but these were both opposed by the Directors, who had a majority of shares represented, and were able to carry a ballot. The shareholders, therefore, left the meeting, and the Directors, with the aid of Mr Knight and Mr Wright, carried the report. Since then a meeting of toe dissatisfied shareholders has been held, and an Executive Committee, including Mr Larnach, has been appointed to report on toe advisability of taking legal proceedings against the Directorate.