TRUST INQUIRY

Dominion, Volume 27, Issue 279, 22 August 1934, Page 9

TRUST INQUIRY

Companies’ Operations CLOSE QUESTIONING Examination of W. C. B. Hewitt Continued COMMISSIONER’S QUERIES By Telegraph.—Press Assn. —Copyright. (Received August 21, 7 p.m.) , Sydney, August 21. The Royal Commission which has been set up to inquire into the operations of seventeen companies, continued its sittings to-day. Counsel assisting the Royal Commissioner, Mr. Justice Haise Rogers, is Mr. J. Monahan; Mr. R. Windeyer. K.C., is appearing for the Investment Executive Trust o. New Zealand Limited, and the Southern British National Trust Limited; and Dr. F. Louat is appearing for the British National Trust Limited, the British National Investment Trust Limited, and Hie Sterling Investments Company of New Zealand. W. C. B. Hewitt, director of the British National Trust, who was being examined when the inquiry adjourned yesterday continued his evidence to- ; day. He said the British National Trust purchased on March 12 last 20,801 ordinary shares in Sterling Investments Company for £2170. Practically all the rest of the investments were advances to the Sterling Investment Company. Mr. Monahan: What are they? Hewitt: “I cannot tell you.” His company also issued debentures for £107,000 to the Investment Executive Trust of New Zealand since June 30, 1933. Issue of Debentures. Mr. Monahan: Did you have a minute dealing with the issue of these debentures? Hewitt: “I had power to issue debentures at any time, and since the appointment of this commission a minute had been entered in the books of the company confirming all issues of debentures.” Mr. Monahan: When your company issues £.107,000 worth of debentures it should get £107,000 for them? Hewitt: I did in effect get that for them. Mr. Monahan: You didn't get cash or securities. Consequently, what did you get? Hewitt: We had the liability of Sterling Investments for them. Mr. Monahan: Was that liability recorded in any way ? Hewitt: It’s just a general liability by Sterling Investments. The commissioner: Do you think the position you have disclosed to-day Is a satisfactory one? Hewitt: I admit I should have known more about where these moneys were going. The commissioner: Can you say at whose request these debentures were issued? ■Hewitt: I was requested by the Executive Investment Trust. The commissioner: Where is the record of the commitments? They were issued to cover, • Hewitt: I have no record. I have, however, discussed the matter with Mr. Glasson. Mr. Monahan: To whom was the actual debenture paper handed? Hewitt: Some of it was handed to McArthur, Hewitt said that when he left New Zealand in February, to provide for advances, he left a certain number of signed debentures with the secretary of the Investment Executive Trust. Close Questioning. While beijj closely questioned regarding the debentures, Hewitt interposed: I prefer to ascertain the full facts from the books rather than give negative answers. The commissioner agreed that it might be as well to call Hewitt later when he had full knowledge of the facts. Mr. Monahan interjected: There are reasons for trying to get the facts out before collaboration between the parties. One object of this commission is to inquire into the methods and activities of these companies. The commissioner: As far as the management of the British National Trust is concerned, only Hewitt can offer any reason why I should not draw the inference that his actions were controlled from outside. Hewitt: I think that is hardly fair. The commissioner: Why? You are asked about the issue of debentures worth £107,000 and you do not know why they were issued. You left a lot signed in New Zealand to be issued and you do not know whether the money was paid or not. 1-lewltt: I see no reason to assume the money was unpaid. The commissioner: Is that the attitude of the managing-director? If •there is any reality in it surely it is important fo the managing-director to know whether the money was paid or whether he has any security. Hewitt: As far as I am concerned I have been relying too much on my faith in other people. The commissioner: My present inference is that somebody called the tune and you moved accordingly. Hewitt: In certain cases I was merely confirming action already taken. Purchase of Yacht. Hewitt went on to say that the Pacific Explorations Company, which owned 27,000 acres north of Auckland, was formed for the purchase of a yacht. He understood McArthur nowowned the yacht while the land was worth £lOO,OOO. "I know McArthur does not make bad deals when he buys.” Mr. Monahan: Or sells! Hewitt: Quite so! (Laughter.) Mr. Monahan then exhibited a certain document which Hewitt explained comprised notes made by him on which he claimed privilege. Mr. Monahan: Do you claim privilege as a solicitor?. Hewitt: I think lam entitled to claim privilege. Mr. Monahan proceeded to examine Hewitt about the formation of the British National Trust, and mentioned a transaction relating to McArthur applying for 65.000 shares. “I suppose there was a plan afoot. to clear a profit through this, too?” Hewitt: I don’t see that at all. Mr. Monahan: Well, there was the num cut up between McArthur and Alcorn in the proportion of four to •ne. Hewitt: Yes. Mpnuhani Wi# were they to np-

ply for all these shares in the British National Trust? Hewitt: It was part of the fransacMr. Monahan: There was £287,000 to be procured and McArthur was to apply for 365,000 five shilling shares in the Southern British Company. There was also a plan to clean up another £45,000 out of the transaction for McArthur and Alcorn. Hewitt: I cannot see that at all. Hewitt’s counsel objected to the words “clean up.” The commissioner: I assume what is meant is profit. Replying to further questions, Hewitt said the British National Trust was to have Issued a million pounds worth of debentures to be used to f i " , '* nce alterations to the company’s building, but not for other purposes. The hearing waa adjourned-