Jeffs puts blame on legal section

Press, 22 February 1978, Page 4

Jeffs puts blame on legal section

PA Auckland The former chairman of JBL, James Edward Jeffs, believed that delays in syndicate settlements in January, 1972, were the fault of legal department organisation rather than a lack of funds, his counsel said in the Court of Appeal at Auckland. Jeffs’s junior counsel, Mr N. C. Anderson, was addressing the Court in the fourth week of a hearing in which Jeffs has appealed against conviction on four charges of conspiracy to defraud the public. The hearing is before the President of the Court, (Sir Clifford Richmond), Mr Justice Cooke, and Mr Justice White. Mr Anderson submitted that there were four circumstances which broke the pattern that might otherwise indicate a guilty knowledge by Jeffs. Memoranda by the appellant close to the time of the collapse had expressed confidence in the company, and persons Jeffs relied on for information and advice had acted with confidence in the company, Mr Anderson said. The fact that the Jeffs brothers put up the family farms for the group and payment was taken in shares, was important, he said. Lastly Jeffs’s willingness to give perwsonal guarantees showed his confidence in the group. On the question of knowledge Mr Anderson said a favourable A.N.Z. Bank report on the New Zealand JBL group, the profitability of the Austra-

lian concern and a profit forecast for the Japanese company had to be taken into account. He also mentioned the absence of memoranda from others suggesting no more than a liquidity crisis and the absence of any suggestion in these memoranda that the syndicate settlement delays were caused by an abscence of funds. Finally Mr Anderson submitted that the apparent motive for the appointment of a receiver was the breach of an undertaking by Auckland executives. This evidence was, from Jeffs’s viewpoint, an unexpected and extraordinary commercial occurence, Mr Anderson said. In reply, the Crown prosecutor (Mr D. S. Morris) on the question of knowledge, said that all memoranda consistently repressed a hope that the money would come from somewhere. He submitted that that was consistent with a knowledge of unsoundness of the company. The fact that Jeffs had had to go overseas to the United Kingdom for mone-y could be taken as evidence that he had known the financial problems of the company in New Zealand, Mr Morris said.

On the point of Jeffs’s personal guarantees, Mr Morris submitted that the company was "already in so deep that a little bit more did not matter.” The haring of Jeffs’s appeal will be followed by appeal hearings for seven other executives and directors of the JBL grou.