ALLEGED FALSE PRETENCES

Dominion, Volume 23, Issue 44, 15 November 1929, Page 12

ALLEGED FALSE PRETENCES

CHARGES AGAINST COMPANY SECRETARY ’ QUARTERLY DIVIDENDS, LTD. By Telegraph—Press Assdciatlon. Invercargill, November 14. The hearing of six charges of obtaining money by false pretences is proceeding in the Supreme Court against David Neilson Johnston, New Zealand representative of Quarterly Dividends, Ltd., and National House Purchase, Ltd. Addressing the jury, the Crown Prosecutor first mentioned that the companies were promoted in England by one William Taverner, who in 1928 toured New Zealand organising his companies in the Dominion. Accused had been appointed secretary for New Zealand and had conducted an active campaign for depositors. He would point out that the two companies were in reality one concern, operating as two companies but under the control of one man. The companies were small concerns with a few shareholders who were in control. He stressed the fact that the depositors did not become shareholders but merely deposited their money for investment and had no say in the control or management. Their money having been deposited, a series of “paper loans” was granted to depositors until the £5OOO class was reached, when it was stated that the depositors would be entitled to draw dividends on that amount for the rest of their lives. The dividends were also stated at twenty per cent. The allegation against accused was that he had informed prospective depositors that by the payment of £2 Is. and 15 monthly payments of £1 depositors would reach the £5OOO class in 7i years. He would call the best actuarial evidence to show that the waiting period for a second loan of £5O would be ten times the waiting period for the first loan, which the experience of New Zealand depositors indicated would be four years. The waiting period for the second loan would therefore be 40 years, and so on down the list, the waiting period automatically increasing down the list. The Crown Prosecutor reviewed the evidence at some length, and said that the Crown would call evidence to show that accused knew that the scheme was unsound and had in fact been informed that it was unsound. Yet despite this he had carried on trading on the faith that ignorant people were apt to place in a man who on occasions preached the gospel. Accused was not an ignorant man; on the contrary he was a man with a University education and was no fool. It would not be necessary for the jury themselves to try to unravel the scheme, since evidence for the Crown would be given by the Government actuary, who would pronounce “the whole scheme unsound.” . . . Evidence > along the lines of that given in the Lower Court was heard, after which the Court adjourned till to-morrow.