Mr, Larnach's Melbourne Revelations.

Evening Post, Volume XXXVII, Issue 17, 21 January 1889, Page 4

Mr, Larnach's Melbourne Revelations.

«. Melbourne, Bth January. Some extraordinary revolutions, exhibiting still further tho peculiar methods adopted in connection with tho land boom, have boon rnado in connootion with tho Royal Standard luvoßtment Company in Melbourno, and thoy havo an increased interest for New Zealand readers, owing to tho fact that tlioir oicposuro is lurgely due to Mr. W. J, M. Larnach. Tho rovolations oamo to light at ft mooting of the shareholders of Ujo company, which was hold ou Friday last, at tlio offices of Jlossrfl. Ilnnting and Wright, Klizaboth-atroet. A peculiar feature in connection with tho meeting was_ that the Argus reporter was ref DRed admission , though other press representatives were admitted. The Arguß, however, got a full report, principally with Mr. Larnach's assistance. The Royal Standard Investment Company was floated in July last for tho purpose of purchasing and re-selling landed property. It did purohaae largely, but has not been able to re-sell in consequence of the failure of the boom. Its callednp capital is .£IOO,OOO, of which over £8000 is overdne, and £25,000 is duo on 31st January. Tho properties purchased by tho company were of the total cost of £348,954. Messra. Runtin? and Wright, in whose offices the meeting was hold, were the managers of the company, and they floatod it. Mr. Runting, who is tho managing director, was in the chair, and when he had moved the adoption of tho roport, from which tho above facts aro taken, Mr. Larnach, who was ono of the dirctors, addressed the mooting. Mr. Larnaoh said that as his name appeared in tho report, and he disagreed with his co-direotors in what had beon done, ho wished to inform the shareholders exaotly how he oamo to be connected with the company, and what his action had been sinco he had been a director. He made a visit to Melbourno from Dunedin, New Zealand, where he residod in April last, and ho determined to take up his residence hero. Ho returned to New Zealand for tho purpose of making the necessary arrangemonts for his departure from that colony, but before leaving Melbourno he was induced to go into several investments, including the Royal Standard Investment Company. He applied for a good many shares in tho Company, and on the day that he left for New Zealand he consented to go on the Board of Directors. He had intended returning to Melbourne in the course of a few weeks, but tnrough illnesß in his family he was detained in Now Zealand three months longer than he had anticipated. He did not got basic to Melbourne until the Cup week. Sood after his arrival he communicated with Mr. Runting and his 00-direotors, with a ylew of having a meeting of the Board, so that he oonld learn what had been done in oonneotion with the company whioh had been floated in his absonco. He appliod to Mr. Runting several times to have a meeting, but that gentleman always said there was nothing to call a mooting for. In Deoomber, being very anxious to know the position of tho company's affairs, be wrote a formal lotter asking that a meeting should be called. Tho result was that one was held on the 22nd of Deoembor. That Was tho first meeting he was ablo to bo prosont at, and he was not only surprised, but astounded at what had been done during his absence He discovered that the company had boon floatod in tho boginning of July, it was roistered on the sth, and on the 6th a meeting of directors was held, at whioh Messrs. W. J. Runtinsr, tho Managing Direotor, J. Reid, J. H. White, and A. Beaver wore present. At this meeting properties to tho value of £330,000 were taken over in tho company's namo, and among these properties were 768 aores ownod by two companies whioh wore in the same offioe as the Royal Standard, and were also managed by Messrs. Bunting and Wright. (Loud groans.) These "sister" companies were the Investment Company of Victoria and the Federal Land Company. The properties, inoluding the 768 aores mentioned, were transferred to tho Royal Standard Company at most exoossive prioes, the old companies making a profit of at least 50 guineas an aore at tho oxpenso of the new company. (Cries of " Shame " and uproar.) He found that his co-directors were either directly or indirootly interested in theßo vendor companies. He also found that some of thorn had on that date sold properties of their own to the Standard, as well as Mr. Wright, the partner of Mr. Runting, the Managing Director. (Benewod groans.) Tho properties whioh were sold by Mr. Wright, and whioh Mr. Runting admitted having an interest in, wore at prioes aggregating over £50,000. There was another property transferred to the oompany at £10,334, whioh Mr. Runting anid his partner had an interest in with Mr. W. L. Jaok, of Messrß. T. Jaoqnas, Martin and Co., Limited. There were other large purohasea mode on behalf of the now company on that day whioh required explanation. He at onoo saw that tho position occupied by his co-direotors as vendors was inconsistent with their duty to tho shareholders of the oompany, and he intimated to them that he could not atrree to what had been dono. He was simply appalled at tho revelations whioh were mado to him at the meeting, and thereforo entered a protest in the rough minuto book, deolining to acknowledge any purchases from affiliated oompanies in whioh the dirootors or Messrs. Runting and Wright wore conoorned, unless they were sanctioned by a genoral meeting of the shareholders. Being anxious to judge of the value of the properties for himself, he visited one of them at Ferntree Gully, whioh had beon hona^t at ,£l6O. n flP acre, and he would say that, in his opinion, it was nor wottn" more than £20 an aore. When he told this to his brother directors ho was informed that he knew nothing about the value of property. His disposition prompted him to immediately resign his seat on the Board, but after mature consideration he felt that it was due to the shareholders that he should at any rate keep his seat until he mot them face to face. (Loud oheerß.) Having now mot them at the first general meeting, and plaoed before them what information he had boen ablo to gather, he would not be sorry to be relieved of his trust ; at the same time he was willing to aot for them in any way they thought was to their interest. The present balance-sheet he had no faith in, and ho had dissented from it before it was issned. The aotion of his 00-direotora ho could only oharaoterise as monstrous — (hear, hear) — and diabolioal, and it was to his sorrow that he had ever been oonneotod with them. (Loud oheors.) Mr. Larnach's speeoh was followed by statements by several shareholders, who had attempted, but failed, to obtain information about tho affairs of the company from Messrs. Runting and Wright. The Chairman was also severely questioned, and he admitted the truth of Mr. Larnaoh' s statements. One property at Campbellfield, purohasod at a cost of £220,000, was sold by tho Federal Land Company and the Investment Company. The Royal Standard Company had no banking acoount, Messrs. Runting and Wright aoting as its bankers. It also transpired that Runting and Wright reoeived no leas a sum than £5000 for floating the oompany, boing commission at the rate of Is per share. Eventually motions were proposed asking the directors to withdraw the balance-sheet, and arrange for the cancellation of all the sales to the oompany, and also of appointing a Committee of Investigation, but these were both opposed by tho directors, who had a majority of Bharos represented, and were able to carry a ballot. The shareholders, therefore, left tho meeting, and the directors, with the aid of Mr. Knight and Mr. Wright, carried the roport. Since then a meeting of tho dissatisfied shareholders has been held, and an Executive Committee, inoluding Mr. Larnaoh, has been appointed to report on tho advisability of taking legal proceedings against the Directorate.