CHARGES OF FRAUD

Dominion, Volume 28, Issue 113, 6 February 1935, Page 10

CHARGES OF FRAUD

Vickers and Gilmour on Their Trial CRAFTSMAN COMPANY Evidence For the Crown The trial of Charles Ernest Vickers and Ernest Maliin Gilmour, who are indicted on charges of fraud arising out of their activities in connection witn the Craftsman .Manufacturing Company of New Zealand, Limited, was continued in the Supreme Court, Wellington, yesterday, before Mr. Justice Smith and a jury. There are three charges against the accused jointly, two against Vickers alone, and seven against Gilmour alone. The Crown alleges that the prisoners made fraudulent representations to a number of persons when selling shares in the company. Tlie Crown prosecutor, Mr. P. S. K Macassey, and Mr. D. W. Virtue, are prosecuting. The defence is being conducted by Mr. W P. Rollings for Gilmour, and Mr. W. E. Leicester and Mr. T. P. McCarthy, for Vickers. Harry Valentine Roberts, secretary to the Craftsman company, auditor, and ultimately liquidator, gave evidence that he had heard Mr. Leicester state that the directors were charged with maladministration, and that it was they who had suggested the prosecution of accused. As liquidator he had investigations made into allegations of fraudulent representations by Vickers and Gilmour, and he obtained the authority of the late Mr. Justice MacGregor to prosecute. Evidence on the internal workings of the company were given by several witnesses, who included two directors. Their evidence was in part to the effect that no patent rights for the exclusive manufacture in New Zealand of the Craftsman company’s' lights actually existed. Farmer’s 250 Shares. Edward Montgomery Herrick, retired farmer, of Levin, described his meeting with Gilmour and Kelly, who demonstrated the lamptto him. They said the light represented the human eye, and they had one on their car. Witness thought it a splendid light. The men said they had the patent rights for manufacturing in New Zealand, and told him that General ‘ Motors had ordered 4000 lamps, that Hannah’s shoe stores were to be lighted with the lamps, that the tramways were going to use them, and the Wellington Harbour Board also. “They told me that the Hotel St. George was going to install Jhe lamps and that this building was a very difficult one to light,” said witness amid laughter. He got his solicitor to look over the prospectus, and the solicitor, who saw the name of Mr. T. C. A. Hislop associated with it, said the company ought to be all right because Mr. Hislop would have nothing to do with anything shady. Witness ultimately handed over his cheque for £250 to Vickers. After cross-examination by Messrs. Rollings and McCarthy, witness left the box with the remark: “I thought' I was dealing with men, but, to my sorrow, I found I was not.” John Thomas Benge, storekeeper, of Upper Hutt, told how he had bought 100 shares on the representations of Gilmour and later another 100 when Gilmour assured him that the shares were being rapidly taken up. In answer to Mr. Rollings witness said tlie only reasons lie took up the second parcel of 100 shares were that he thought the investment a good thing, and Gilmour’s assurance that the share list was on the point of closing. He denied that lie had aspirations to becoming a director, tlie qualification for which was 200 shares. “Enthusiastic About the Lights.” Cross-examined by Mr. Leicester witness said he bought his shares actually because he was enthusiastic about the lights, but he believed that the Craftsman company had the patent rights for New Zealand. The secretary of the New Plymouth Harbour Board, Clarence Sydney Rennell, gave evidence that at no time had the board negotiated with the Craftsman Manufacturing Company, nor had any representative of the concern called upon tlie board or any member of its staff. Neither Vickers nor Gilmour was known to tlie witness or to anybody officially connected with the board. An Auckland chemist, William Hugh McKinney, described how he had taken 200 shares in the Craftsman company, giving a cheque, for £lOO and a promissory note for £lOO. It was represented to him that the Wellington and Timaru Harbour Boards would install the company’s floodlights, if tests were satisfactory, as they were bound to be. Later, on a promise of a directorship, witness took a further £5OO worth of shares. Gilmour said tlie Government's Hutt buses were being fitted with the light reflectors and that some tennis courts at Lyall Bay had installed the lights. Gilmour resigned his position as director in favour of witness, the reason given by Gilmour being that he was too busy as manager of the company to continue on the directorate. , To Mr. Rollings witness admitted he had been a shareholder in an Australian company selling the lights two years before he received notice from Australia that a New Zealand company was to commence operations. No Australian Dividend.

Witness told Mr. Leicester that he had received no dividend from his shares in the Australian company. He admitted having become a small subagent for the sale of the reflectors, and lie sold shares on commission to his friends. His idea in wanting to be a director was to get something out of the New Zealand company in fees in order' to make up for what he had not got out of his Australian shares. Witness had not. endeavoured to sell his own shares in the New Zealand company to his friends. He might have casually asked Gilmour to find a purchaser for his shares. The case is proceeding.