BADAK TIN

Evening Post, Volume CIII, Issue 3, 5 January 1922, Page 11

BADAK TIN

A SHAREMARKET BUBBLE

CHARGES OF CONSPIRACY

GIGANTIC MINING SWINDLE,

A Press Association cable message received from Melbourne yesterday reportedl that -Thomas West Orton, mining- Engineer, has been remanded on bail on a charge of conspiracy, to 10th January, Henry Scarborough and Alfred Clarke, director* of the company, were recently remanded to the same date. The charge against them is that they conspired with Orton to defraud. Ortori, as the Badak Mining Syndicate's representative in the Federated > Malay States, made the first test borii>gs on the syndicate's Jeneri property, at Kedah, and it was on his reports of enormously rich tin deposits that the Badak £10 paid shares rose at a phenomenal rate on tKe Stock Exchange until they " blew out " at about £2000 each! At the height of the Badak boom he returned to Melbourne, and.iemaihed there during the sensational disclosures' as to the worthlessness of the Badak property as a mining field. What has be«n popularly called "the Badak swindle" was admittedly the. most gigantic mining fraud ever foisted on tliß public of Australia, sayfi the Melbourne Age. Mr J. '*£. Keane, a Bendigo solKifor, who occupied the chair at a meeting of anxious shareholders subsequent to the bursting of tha bubble, described it as "either a great conspiracy dr a groat fraiid." Many deluded and impoverished shareholders agreed with him. " , Th« Badak Alining Syndicate iru formed in Melbourne irt 1918, when, tin under wax conditions had reached the phenomenal height'of nearly £400 a ton, tci prospect H pr^psriy at Badak, in the Federated Malay States. The original" •jttpital wiis 100 sKareii, of. £lO each, whicii later, to meet tie cost of bbring properties, was increased to 600 shared, of £ld each, 6f which 200 shares ■were hot issued. Of the 400 shares, 200 were paid fca £10 and 200 to £9 per share. Matters iri connection with the syndicate were "dead,"' from a public point of view, until towards the latter part . of 1919, when, reports Were received from Mr. T. W. Orton, the syndicate's representative, in the East, stating that he, had test-bored the Jenerel property, in the State of Kedah, F.M.S., and seven holes had given from 3.51 ib to lY.B3ib of tin t6 the square yard, arid that the seven holes had averaged 1.141b. Early in 1920, it was repoft^d that Orton had piit doirfn twenty boreS oVer an area of 100 icres to a- dfSpth of 18 feet (not bottomed),- for an average yield Of 141b of 47 pet cent, metallic tilt'per cubic yard, and that Mr. William Wilsdn,-whti. had been appointed to check-bora [ ' the property, hrtd advised «v»ri ft higher value ffian that rejiorted by Orton. ' TKen the spocvilaiofs got biisy. Tin at this period was well over £*00 a ton, aftdthe apparently1 'conflrmod reporta, which were Accepted aaj itithentic and ■u'fideniable, made oat the property W bk fabulously I'ich. Mr. Wilson said, "It is by far the' richest property I have' ever seen.". During the second week in January small loti> of the. £10 shares wex-e purchased on the Melbourne Btoek Ex change' ftt £163. A cable niessage from WilsoU, reporting 191b of tin per yard in a bore Siift dee{>—^wfhera Orion hid previously advised 221b in an 18-foot bore —cunuad iliares to jump to D4OU. On 15th January, 1920, although no further iiewe1' was received, twelve chares changed hitnde at £706, aii- advance of £557 a share i«''4B hours. Oh 6th January a letter from Wilson caused o{>era tors-to pay -up to £14()O for a £10 Shar« in the syndicate, but a'couple of days' later,- on rumours of "a fly iri the ointment," shares slumped Io £560,' but Jecovered rapidly to £.750. On 17th February, however, the excitement burst out afresh. On the strength of a cable irom WilScHl, "Satisfied property good," eager speculators, blinded *ith dreamt of coimtlesa millions p^uriilg into their banking account, paid up, to £2000 for a £10 share, the scene on the Stock Exchange resembling ill a small way tMe madness on the London, Stock Exchange ftt the height of the South Sea. Bubble. "Pup" syndicates wete hastily forinejd to take vtp areas near the Baditk property rtrid shared in these soared to ten times their nomin'i' value Mr Orton returned to Melbourne, and was present At a meeting of shareholders oh 10th March, 1920, when the syndicate was floated into a company of £750,000, in.750,----000 shares .of £l each, of which 400,000 fully paid ehaies toent to the syndicate as vendow!, equal to £1000 per £19 share, besides prior right* to a further 200,000 shares The "discovery" of this hew Elldorado m the1 East w«s -warmly eulogised, reference was made 'to the staunch and honourable dealings -with the boaid, and shareholders enthusiastically \otcd Orton £IG,OOO, of which £6000 was to be cash rJown (in the form of application -money on 30,000 shares). At this, time, the £10 shares were selling at £1475 Mr. Wilson, also was in Molboume and Behdtgo about the sama time and personally confirmed his reports of the richness of the field. Early in. August, however, th« smash I came Sir', li S Scarborough, one of the directors, had gone to the Malay i States to check, the test bonnge, and he cabled that 80 boie*. had been put down, and found, valueless, and he tvas convinced the property was valueless. The price of thg shaies tumbled almost to nothing The great bubble had burst, humeious investors throughout the State, but paiticularly in th« metropolis and in Bendigo, being hit very bard' Orton and Wilson maintained that then- reported values were genuine Scilrboiough. on hife letuni t& MelboUrne, confirmed his cable message, and admitted at a meeting of shareholders that ii week beforo he had .icfoised the board officially that the property was valueless, he had cabled a co-direcix>r, Olark^ who held Scarborough's power of attorney to srell shares, "Charlie hopelessly ill. They two were carrying the livrgest number of shares, and the message was ar instruction to sell out beitore the "deluge" came on. The company then sent ite manager, Mr. J. B. Raleigh, to Kedab to tnak« fen investigation, but Mr Raleigh was drowned most mysteriously at Brisbane whilst tin thfe rfettifti trip. Then the Victorian Government, in response to strong public clamour, supported ,l>y the Badak Company, which Votad/'£2so towards the expense^ sent Detectives 'Grieve and Commons tc • Redab to conduct aD :n----vestigation into the whole unpleasant 'business. The isiue of the warrant for the airest of Orton was the first outcome of their inquiries.. Whenhe was arrested', he hatl_ a very large sum- of money in his possession,