COMPANY CLAIM

Dominion, Volume 29, Issue 303, 18 September 1936, Page 10

COMPANY CLAIM

+ Activities of “McArthur Group” EVIDENCE IN AUCKLAND CASE By Telegraph—Press Association. Auckland, September 17. Further information about the formation and activities of a number of companies belonging to what is known as the “McArthur group” was given during the hearing of the Redwood Forests case in the Supreme Court today. Mr. K. C. Aekins, solicitor, said he had been chairman of directors of Sterling Investments from its incorporation and still was a director. His codirectors had been C. G. Alcorn and Glover Clark, but Clark had resigned after about two years. No cash was subscribed by shareholders at any time, and as far as he knew the- cash to start the company came from the Investment Executive Trust. McArthur and Alcorn really ran the company and dictated all its policy and carried it out. He never did anything on his own initiative, but on the instructions of McArthur or Alcorn. Witness said he knew Sterling was buying Investment Executive Trust debentures, and these were being bought by V. B. Mclnnes and Company and being taken over by Sterling. He understood the object Of buying those debentures was to keep up their price, ]He remembered some transactions dealing with McArthur’s Hillsborough property and he thought Sterling took it over and also some Newmarket property that belonged to McArthur. Witness identified signatures on a cheque of February 28, 1934, of Sterling Investments to. J. W. S. McArthur for £60,000 and also a cheque of the same date for £60,025 drawn by Wynwood Investments in favour of Sterling. Mr. Johnston (for defendants); I would like to see a cheque of this size. Mr. Barrowclough (for plaintiffs): My friend has not been long enough in this case or he would have seen dozens of them. That’s a mere bagatelle. Norman Alexander Duthie, public accountant, said he was one of the inspectors appointed by the. Government to investigate the affairs of the various companies. Witness described the origin of Kotahi Lands and said Edgecumbe Forests acquired all the shares in the Kotahi company. Witness said that in May, 1931, 21,224 acres was sold to Timberlands Woodpulp, Limited, for £33,350 Timccrlauds gave a mortgage back for £28,350, leaving £5OOO which was apparently paid in cash. TJje Edgecumbe company was wound up in March, 1933, and the books handed to the Sterling Company for safe custody. When £5OOO was paid back off the Timberlands mortgage it was in part distributed in loans free of interest to shareholders, and loons of £3O/8/- and of £750 were made to McArthur. Witness traced further repayments of £5OOO off the Timberlauds mortgage and said £l5OO and £lO5O werq advanced to T. R. McArthur, who he believed was the son of J. W. S. McArthur. Sums of £4600, £7750' and £9OO were lent to Sterling Investment. “Sterling company,” said witness, “on March 6, 1933, paid Edgecumbe £19,300 in the purchase of its assets. This was two days later lent back to Sterling company on deposit at call at 3J per cent. This £19,300 unsecured loan was an asset of the company and passed as- such into the liquidator’s hands.’’ The hearing was adjourned. •