JBL in $290,000 property deal just before crash

Press, Volume CXVI, Issue 34099, 11 March 1976, Page 2

JBL in $290,000 property deal just before crash

rhe JBL hearing is before an Otahuhu magistrate, Mr T. G. Maxwell, S.M.

James Edward Jeffs and Vaughan Joseph Jeffs. JBL Consolidated, Ltd. and nine Auckland men, face a number of charges alleging conspiracy to defraud and fraudulently promoting.

The Jeffs brothers are not present for the hearing.

Ihe other defendants are Barrie Phelps Hopkins and Michael Bruce Gurney Thomson, solicitors; Rex Evans, Hugh Stephen Fanning, Hugh Buchanan Jones, and Eric Walter Thompson, chartered accountants: Francis Wil--11 ar. Ralph and Philip Paul Sergent, company directors: and Peter Kenneth Le Neuve Arnold, company executive.

The Crown is represented by Mr D. W. Baragwanath, Mr D. S. Morris, and Mr A. B. Lawson. Mr C. S. Ennor, and Mr G. M. Foy appear for Sergent, Mr M. D. Robinson and Mr R. J. Collis for Ralph, Mr L. W. Brown, Q.C., and Mr G. N. Jenkins for Hopkins, Mr S. G. lockhart for Fanning. Mr J. S. Alexander for Evans and Thompson, Mr J. S. Henry and Mr C. B. Littlewood for Arnold, Mr R. R. Davison. Q.C., and Mr N. J. Carter for Thomson. Jones is not represented.

tn Z Association; AUCKLAND. March 10. The JBL lower court hearing was told today that the firm was in the process of buying property for $290,000 on a $3OOO deposit shortly ■ before the firm was placed in receivership.

Victor William Hall Trayes. secretary of Campbell and Ehrenfried Company, Ltd. said he represented his company m the sale of three properties, including premises at Union Street, to JBL An agreement for sale and purchase w-as signed by his company and JBL Developments (Auckland). Ltd. on March 2. 1972 The settlement date was June 30. 1972. and rhe total price was $290,000 on a $3OOO deposit. The deposit was received from JBL on March 2. ; Attempts to settle took place between his company and the receiver, said the witness. The'e culminated in a letter stating the receiver was unable to complete the purchase. A witness, whose name was suppressed, said that he became interested in the (Union Street syndicate. ■ He met a Mr Rassie (a former salesman with JBL) •and thee discussed the svndi- • cate.

He decided the Union Street No. 1 syndicate was suited to the amount he had available.

"I could see 1 had some’hing like 535.000 coming

up: it was not immediately available.” he said. The amount would have been sufficient to take the whole of No. 1 on his own. He had $20,000 on hand. JBL wanted the syndicate price paid in one lot. but after discussion it was agreed that

the witness would pay a deposit of $20,000 and the remaining $15,000 on settlement or the deeds.

"It looked a good deal, and I am quite sure it was,” the witness said. “I understand the Crown subsequently paid $130,000 for that piece of land "

The witness said he felt that the $20,000 deposit should be held by the solicitors appointed to act on behalf of investors.

He found later these solicitors were also employed by JBL. A Mr Littlewood (bead of the investment division) and Mr Rassie had assured him that the money would be paid into a trust account. He was not satisfied, and thev asked a man from the legal department to ioin them. This man. said the witness, also assured him the money would be held in trust, and showed him a brochure stating that this would be so. “I accepted this, and went home to think about it,” he said. He decided to go ahead with the proposal, and sent a $20,000 cheque to JBL. Soon after he received a trust account receipt and some documentation.

He signed this and on May 19. 1972. sent it, with a cheque for $15,000 to complete the balance, to a Mr Cormack, of Turner. Hopkins. and Partners.

He was preparing to go to Australia on the day the company collapsed (May 23). He went to his bank and stopped payment of the $15,000 cheque. Neville Edwin Dodge, a chartered accountant, of Christchurch, said that early in 1971 he invested in two syndicates. He also had $7OOO in debentures.

He had two meetings with company representatives. No business transaction took place at this stage, but he got the impression that JBL was prospering. Mr Dodge said he had money on debenture until a suitable venture became available.

He applied initially for the George Street Syndicate. A Miss Gray (a former secretary/sales administrator) wrote to tell him that the syndicate was full, but there was a vacancy in the Port Road No. 2. In a letter dated May 12. 1972, he accepted this and asked for the $7OOO to be transferred. He ended up With $7OOO in the syndicate and $2OOO on debenture. He told the Court that it was indicated that building was 80 per cent completed, and that documentation would be finished very soon.

He was. he said, to receive interest of 10 per cent on syndicate money from the moment JBL received his cheque. He thought this was a fairly high rate of interest, and looked at the interim accounts.

When he saw the profit shown for six months was $403,000 he presumed the company was capable of attending to the payment on any money he invested.