TEN CHARGES

Press, Volume LXXIX, Issue 24053, 15 September 1943, Page 6

TEN CHARGES

♦ COMPANY PROMOTER BEFORE COURT

ALLEGATIONS OF FALSE PRETENCES

(P,A.) DUNEDIN, September 14. Three charges of issuing false balancesheets, one charge of publishing a false statutory report,, and six charges of false pretences relating to the sale of shares, were' brought against Stanley Reginald Bufhs, a company promoter, now of Christchurch 1 , in the Magistrate’s Court. Mr J. R. Bartholomew, S.M;, was on the Bench. Mr F. B. Adams prosecuted, and Mr G. V. Murdoch appeared for the accused By agreement, all the charges were taken together. The charges relating to the balancesheets and report covered the Issue of documents in connexion with the organisations Known as S. R. Burns and Company, Ltd., and Rental Incomes and Estates Ltd; The charges of false pretence involved allegations of falsely • representing to prospective buyers of shares in these concerns. After evidence of some witnesses had been heard the case was adjourned until to-morrow morning. Francis Merlin Warren, Assistant Registrar of Companies, gave evidence concerning the organisation of the company known as S. R. Burns and Company, Ltd., which commenced business in March, 1934, and of Organisers (N.Z.), Ltd.', a private company which began in the same month. The capital of the latter was £2OO. Leslie Murray and John Leonard James each holding 100 shares. In 1937 both these holdings were transferred, and witness produced documents showing that in April. 1938, Stanley Reginald Burns was the holder of 105 of the shares, and Leslie Francis Foote, of 95 shares, * Purchase of “Sun” Building

Witness also produced a written offer by Organisers, Ltd., to S. R. Burn*, Ltd., to: purchase the “Sun” newspaper building for £14,900. The offer was accepted by Burns and Company. Witness went on to show that In September. 1937, the capital of Organisers, Ltd., was increased by the creation of 3900 preference shares at £1 each. These shares were allotted to S. R. Burns and Company in fully paid shares as part • payment of the "Sun” building. S. R. Burns became a director of the company. Referring to the company known as Rental Incomes and Estates, Ltd., witness said that this concern began business *ln July, 1938, with a capital of £23,000, comprising 10,000 preference and 13,000 ordinary shares, each at £l. The first directors were S. R. Burns and D. C. Cameron. Another company, Eudora, Ltd., originally Roxana, Ltd., was registered as a public company in July, 1935, and witness produced balance-sheets of the company for 1937, 1938, and 1939. The first directors of this company were Burns and W. Peirson. Robert Debbie, a farmer, of Edendale, said that he had purchased £2OOO worth Of debentures in the Dominion Executive Trust from Burns, and had subsequently sold these for £1995, and had been allotted 2100 shares In Burns and Company, Ltd. Witness had purchased further shares in the latter company. Witness also purchased 130 preference shares*in the Organisers (N.Z.), Ltd., for £l2O, the shares being transferred from Burns and Company. Ltd. Proposed Use of Building

Witness related his dealings with Burns in connexion with the purchase of the shares of Organisers, Ltd. Burns had told him that they were negotiating for the purchase ot the “Sun” building, and that he (Burns) was asking all clients to'forego them dividends and put the money into this venture, which was going to be a great success It was suggested. Burns said, to have a dance hall on the top storey of the building, and garages and shops underneath. Witness also described his dealings with Burns in Rental Incomes and Estates, Ltd., in which ne received 250 shares. In regard to Burns and Company’s balance-sheets, witness had thought the position was not too good before the company went into liquidation. Burns had told witness that he was preserving his clients’ capital. Catherine Meek, a married woman, of Fairfax, also related her dealings with Burns in the purchase of 1000 shares in Organisers. Ltd., in 1938. Further evidence dealing with the purchase of shares was given by several witnesses. Evidence as 'to the negotiations for the purchase of the “Sun” building and Avon Motors building, Christchurch, and also of premises in Moray place, Dunedin, occupied the greater part of the afternoon. Leslie Francis Foote said that in 1938 he was a director of Avon Motors, Ltd., of which accused was chairman of directors. Witness had mentioned accused that the ’Sun” building was for sale, and accused secured an option to purchase it for £II,OOO or £11,500. A first mortgage of £7OOO was raised, and Organisers, Ltd., which accused had acquired, was to be the purchaser. Witness became chairman <of directors of this company, in which he had taken 100 shares, but when the company bought the “Sun” building witness knew nothing whatever of the financial position of S. R. Burns and Company, nor had he anything to do with Rental Incomes and Estates, Ltd.