LYSNAR CHARGES.

Press, Volume LXI, Issue 18343, 28 March 1925, Page 14

LYSNAR CHARGES.

MEAT WORKS COMMISSION.

YESTERDAY'S PROCEEDINGS

(PHISS ASSOCIATION TELEGRAM.) WELLINGTON, March 27. The cross-examination of Mr W. D. Lysnar before the Meat Works Commission concluded this morning, and evidence was then called by Mr M. Myers, K.C., on behalf of the National Bank. Mr Myers asked Mr Lysnar: Do you mean to suggest to the Commission or to any sensible man that banks would recommend their clients or the public to invest in debentures of the Poverty Bfiy Company as it stood in 1923*

Mr Lysnar: "I do; and I can prove it." He added that he approached each of the managers, each of whom wrote to their head office recommending it to support the company. They expressed satisfaction that the company's work 3 were good enough. The lives of the directors of the company were a misery .i.nd a hell upon earth through negotiations with the National Bank.

Mr Myers said he was sure Mr Jolly reciprocated that, but from the opposite viewpoint. Dealings with the bank, continued Mr Lysnar, were like getting blood out of stone.

Mr Johnston then read the following n.->te made by Mr Jolly concerning Mr Lysnar's alleged proposal to dispose of ■the Admiral Codrington to an overseas shipping company:—"Mr Lysnar informed me that he had put up the proposal to Findlay, of the Shaw, Savill and Albion Company, that as the price of Mr Lysnar not assisting or promoting the Shipping Board Bill, the Shaw, Savill and Albion Company should take over the Admiral Codrington at from £160,000 to £170,000, but if they did not do so he would press for the Shipping Board Bill, which the Liberal and Labour Parties would support, and that when the Board was formed the Poverty Bay Meat Company would unload the Admiral Codrington on to the Board at £i50,000." Mrs Lysnar said he had heard that for the first time.

"Mr Jolly," said counsel, "has made a note in his diary that he told you that.". . '

'"'Then he has made an erroneous note absolutely," said Mr Lysnar. When he mentioned it to a shipping man ho made no offer. • Witnoss said the steamer was for sale, and if a man chose to get his people to' make an offer it would be entertained.

Mr Johnston: This note means if Mr Jolly is correct, that you have no moral sense at all? Yes, but it is untrue. It means that you" practically went and volunteered,to Mr Jolly that your vote in Parliament was for sale —Yes and he has found out it is not for sale. • ..■•• <

Mr Jolly 6ays ho said I told him •he was mad to make such an offer on such conditions to anyone, and that even if such a Board. were formed I was satisfied that neither the Board nor country would stand for such a deal. "Do you remember him telling you that?" asked Mr, Johnston. "Nothing at all about that," declared Mr Lysnar. . . Bank Manager's Evidence.' Mr Myers then called Alfred Jolly, general manager of the National Bank of New Zealand. 'Witness said he noticed in 1923 in the annual report of the Poverty Bay Company a charge that the bank had sacrificed the company's property at half its value. The same complaint was made in the report of 1924, and the same charges were levelled against the bank in certain quarters throughout the Dominion. Mr Jolly said he felt called; upon to vindicate the bank's position, so he cornin unicated with the Prime Minister. The true index-of the company's position was the overdraft. li the overdraft was increasing, in excess.of the fixed assets, then one must look at the liquid assets to be satisfied that the increase in the overdraft w.as represented in liquid assets.. According to • advice from the Gisborne branch-two or three days ago,, the company was returning less thai 10s in the £. "I submit, then," said .Mr Jolly, "that I was perfectly justified in stating to the Meat Board- that the company was hopelessly insolvent. Mr Lysnar sajys he had hell while he was dealing with the bank," said Mr Jolly. -;•■•■• "And you were suffering in the same way," suggested Mr'Myers. _ "Yes, he had hell," agreed witness; "and I had the tortures of the damned." , On a rough calculation, Mr Jolly estimated that the bank would lose about £43,000 as a result of the company's failure. Questioned about the entry in his diary, witness said that he said to Lysnar: "What will bo the consequence if Mr Findlay discloses this?" Mr [Lysnar replied: "Oh, the conversation was a confidential one. He won't dis-. close it." - • Mr Myers; Can there be any doubt whatever of the correctness of your note? Witness replied that he would not swear to the words used, but he had sot down the purpose and spirit of what Mr Lysnar told him. "Did the interview of that day have any weiglrt with you in determining your course of conduct in regard to the eompany?" asked Mr- Myers. "Of course it did," replied Mr Jolly. "If 1 have a company on my books owing £300,000 or £350,000, and the chairman of directors can put up a proposition like that, I feel that the quicker I can get it out of my books the happier I will be." , Purchase Price of Works. Mr Jolly, in reply to Mr Myers, said the price as>ked for tho works whea sold was £225,000. Mr. Myers: If. the bank could have Ttiade, a sale at anything iu excess of that sum, Vesteys would not- have got the property?— No. As a matter of fact did your bank get as much as. £225,000? —No, because Vesteys would not bid more than £212,500. That was the maximum. I think that yon estimated the value • t oS the _ works for the purpose of. sale at £225,000, .and you had to jrive Vesteys a concession in order to get them to buy?— Yes. So the position was that the bank lost £12,500, the difference between the estimated market value of the works and the actual price received ironi Vesteys?—Yes. The alternative to Vesteys getting the property was for the bank to buy it*n?—Yes. Asked if the bank would have carried on the company, knowing the position as he did at the time, Mr Jolly said he had no opportunit\ r of considering that question. was no offer of any more money coming in, but had any adequate offers been forthcoming, tho bank might have carried the company on. Describing the interview with Messrs Lysnar, Witters and Cooke in September, 1923, Mr Jolly said Mr Lysnar requested at the interview that the bank should not proceed with the sale of the works, and made a proposal which he (Mr Jolly) could not aecept,

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as he did not regard it as a business proposition. Financing the Admiral Codrington. Mr Jolly dealt at length with the steamer Admiral Codringtou. and gave financial details concerning the voyages to and from England. To.save the company, which then controlled the steamer, from being subject to legal proceedings in England, the National Bank found a sum of money in connexion with the steamer, but "in 1923 the bank refused to advance any money whatever towards the cost of the voyage out, and nothing for disbursements in London' when the vessel arrived Home.

Beferring to the decision of the bank to insist on the .sale, Mr Jolly stated that Mr Lysnar, on being informed of this, said he would fight the bfliik to the last. Witness replied that so long as he confined the fight to legal grounds the bank would fight in return. Mr Lysnar also said that the Meat Board had no legal right to consent to the transfer. .Witness continued: Mr Lysnar, - as he left my room, said to me: "We will beat you," and I told him that he had no more chance of beating me than he had of leading Gabriel's Choir in Heavc-u. Allegation Besented. Witness denied that at the interview with Mr Lysnar at his hotel that witness bad been charged with bribing him (Mr Lysnar) in regard to his insistence on the sale and concessions to the guarantors conditional upon the directors' consent to it. <*l had no reason to try to bribe Mr Lysnar," warmly addod Mr Jolly. "I have never failed to compel Mr Lyjnar to do what I wanted him to do, or the directors, toe." ' The Commission adjourned until Monday. ■ v • ' -..-■■