INVOLVED ESTATE

Press, Volume LXVI, Issue 19975, 9 July 1930, Page 9

INVOLVED ESTATE

CHINESE BANKRUPTCY. OLD DEBTS AND DEPRESSION BLAMED. Business transactions which. were very involved in character were revealed at a meeting of creditors .of George Ah Chang, a Chinese fruiterer, •f Colombo street, Christchurch, which wos held yesterday afternoon before the Official Assignee. "I came to Christchurch in 1925 to become a partner of George Chew Lee and Company, then carrying on. a business as general greengrocers," said bankrupt in his statement. "I invested no money in this business, but worked«u salary at about £6 per week. iSigliV teen months later 1 dissolved partnership with George Chew Lee and Com{miiy, but remained in Christchurch ooktng for u suitable business. In March, 1927, George Chew Lee aiid Company assigned their estate to creditors, when 1, with Willy Wong, entered into partnership and took over the business, including the assets and liabilities. The purchase price for the business was £2625. Wong paid £IOO deposit, following which I paid, on behalf of tho partnership, the sum of £1654 19s 2d. "In August, 1928, I bought out Wong's share of the partnership for £450, paying £IOO of my money in cosh, and the balance of £350 waa advanced by the trustees of Chew Lee's estate. From August onwards I carried on the business on my own account-in Colombo street. In 2>ecember, 1928, I bought the Cashel street business for £3OO, by taking over the liability of the former owners. Over the period December, 1928, to November, 1929, I lost about £l5O. I ■old the business in November, 1929, to George Shew for £2BO, payments being made in £SO down and the balance in instalments from time to time. 1 do not owe any money on the Cashel street shop. I sold the Taihape business in 1927. There were £650 liabilities on this business, due to mismanagement by the man left in charge. 1 sold the business for £2OO, the sum to be paid by Wong King,' the new tmrchaser, and the balance of £4OO liabilities to be paid by me. 'I borrowed the sum of £4OO from fellowcountrymen to pay these acoounts. Wong King paid off only £l6O of this amount of £2OO. I paid £450 in settlement of the liabilities on my part, and also £2O to Slater and Company on behalf of Wong King. My ..only liabilities in respect of the Taihape business are £4O to Sing On Kee, and £2O to Slater and Company, as I have repaid the bulk of the borrowed Inoncy. The remainder of my liabilities are in respect of the Colombo street shop. In 1928 I bought the remaining one-third share in the Colombo street shop for £4OO, by nllowng this money to remain owing: to the trustees under the deed of assignment. I carried on business solely at Colombo street until Jnne 13th. when the trustees took over the business, paying me £5 per week. Action of Creditors. "The cause of my bankruptcy, I belieye, was the action of Rndlcy ana Frampton, to whom I owed £o2 for fruit purchased over the last f° Hr . months. Their action seems to nave resulted from the trustees taking over tho business in the meantime, an paying me a, salary- Since last CnrntWiw. business has been very P°*V Owing to the 'police restricting the s. of fireworks, mv usual Ba '^ vt w f re 1 qoo *wed about £3OO. From 1927 to 1928

my takings for fireworks amounted to £304 17a. 7(1, the following year £754 ,13s Bd, while from 1929 to 1930 the takings were only £404 4s 2d. This, combined with the difficult period since Christmas, has resulted in my being unable to meet my liabilities to Radley and Frampton.' Previously Radley And Frampton had accommodated me with payment by way of promissory notes. Satisfying the . old accounts owing to Wellington merchants inpurred prior ' to taking over the Colombo street business, and the subsequent depression account for my present position." The amount owing to unsecured creditors was £717 9s, and to secured credit org £2279 15s 9d (less estimated value of securities, £1000), making a total of £1997 4s 9d. The assets were nil, the. amount last quoted thus being the deficiency. There were 28 ilns£cured creditors. Mr J.. H. Robertson, Official Assignee, presided over the meeting, which was attended by a large number of creditors or their representatives. Mr W. J. Stacey appeared for the bankrupt. Air Stacey said there was a bill of sale of: £IOOO over stock and fittings. Mr Robertson said the position seemed to be rather involved. In xepl.v to the Official Assignee, Mr Stacey said bankrupt would be sworn in. the Christian fashion. ''You don't need the services of an interpreterf" asked Mr Robertson. Bankrupt: I am onie myself, sometimes. Yon tell me you have no assets? Under the bankruptcy law. it is the duty of the insolvent to disclose all the assets he owns. You have none? —None at all. None in China ?—No. Have you always been solvent up to the present?— Yes. Tn replv to further questions, Ah Chang said he was 30 years of age and unmarried. Subsequently ho said he had a wife in China, to whom he sent money sometimes. Last year he sent his mother about £SO. and the year before about £3O. He had no children. He went to Taihape in 1923. v A Business In Taihape. When lie left Taihape he handed the .business over to another Chinese, who was to account to him for the profits, for the £2625 he purchased tho goodwill, stock, and fittings The stock Consisted of silk garments and fireworks, and the goodwill was £1325. Mr D. M. Park said one-third of Chew Lee's business had been at first retained on behalf of the Chinese creditors. Ah Chang said that in August, 1928. he owed the trustees about £IOOO ; now it was over £2OOO. The growth in the debt was accounted for by the fact' that the trustees had supplied him with fruit. I Mr Stacey said the rent owing was about £100; the trustees had guaranteed payment of this. Ah Chang snid that in August, 1929. he owed over £3OO to outside' people.' Mr. Rof>ertson: Did you keep any books?— Yes. Mr Stacey said there were three books in Chinese characters. - Ah Chang said h;s books . only rovered his dailv takings. . He hnd kept no record of his debts, and made out no balance-sheets. Mr Park said that at the time his firm took over the business, the landlord was threatening to distrain for rent. ' Mr Robertson said Ah Chang did not apnenr to be hiding anything. The ito"k had been valued last month at £99. . • Ah Chane said his fireworks mipolv was obtained on consi ,T nment. He hud an account at the Bank of Australasia. Accounts were pnid bv cbeoue and watres. in rash. He had three pmril'vwes ih ord'»irv tinies, and four at Christmas. Some of the men he paid £4 * week and others £3 10s. His

rent was £lO a week, and the sales were about £l5O per week. He did not gamble much or play pakapoo. "I will swear 1 did not waste money at the races," said the bankrupt. Since 1927 he had drawn a little over £SOB from the business. Mr Longton took over the business on June 13th. His sign was not; taken down, and he was merely working for the trustees now. Mr Park said it was quite a common practice among Chinese to exchange their liabilities and their assets. _ The Chinese usually reckoned on having a cross profit of 4s in the £ on the turnover. Mr Robertson said he wondered whether the books in Chinese could be interpreted. Mr Stacey: I could almost do it myself now. Mr Robertson told the bankrupt to bring Shew to see him. They might have a motion about the trustees' action in seizing the stock. The whole thing was bristling with technicalities. If there was any lawsuit, it would hare to be originated by a majority of tho creditors, and they would have to guarantee the costs. The dealings of the bankrupt appeared to have' been very complicated, but Ah Chang gave no sign of having acted improperly,, and he had answered all questions fairly frankly. It was decided to leave the estate in the hands of the Official Assignee, and that the question of the seizure of the stock be investigated. Mr Park said that if any creditor present would like to take over the trusteeship of a Chinese estate, he would not stand in his way. (Laughter. i