THE INVESTIGATION

Evening Post, Volume CXVIII, Issue 35, 10 August 1934, Page 10

THE INVESTIGATION

PRELIMINARY STEPS

VISIT TO AUSTRALIA

Tho presentation of tho interim report by tho Companies Promotion Commission and tho legislation which followed in reference to the activities of certain trust investment companies has lifted tho veil of secrecy from tho visit rocehtly paid to Australia by tho Secretary to the Treasury (Mr. A. D. Park) and the chairman of the Commission (Mr. J. S. Barton, S.M.). The origin of tho inquiry dates back to tlib appointment of tho Commission by tho Government to inquiro into tho methods of company promotion in Now Zealand. The appointment redeemed a promise made when the Companies Act of 1933 was under consideration. Under their warrant the Commissioners quickly gathered together information from every accessible source, including the Treasury, the companies' offices, tho Industries and' Commerce Department, the Stamps Department, and various other channels and quarters in which inquiries and discussions had taken place from time to time on matters affecting the promotion of .companies. Starting from tho basis of this collection of facts and figures, the-investigators inquired into tho affairs of about 100 companies, and, presumably, in the course of thpso investigations, certain features in connection with the promotion and management of companies camo under notice. With the prosecution of theso examinations camo a greater interest in ,tho 'affairs of particular concerns, and with tho unravelling of: tho details the need for urgent inquiry in particular directions apparently was emphasised. Then followed the careful searching of documents and the annual returns filed by companies, and tho discovery of the connecting links'in the financial chain with which tho Commissioners were then concerned. The ■ closing of certain cloors-on endeavours to obtain further information, and an excursion, into the fields of litigation delayed the inquiry, and the Commission was obliged to present an interim report to the GovernoT-General and to suggest another form in which tho investigations could bo carried on. ': MISSION TO AUSTRALIA. From . the Governor-General tho report went to tho Primo Minister and the Minister of Finance, and from, the timo of its receipt by, tho Ministers until the passage of tho legislation by Parliament on Wednesday night there was a series of swift developments. The drafting of tho special legislation sought by tho Commissioners was put in' hand immediately, because somo timo and consideration were required for the preparation of tho terms of tho measure, which has now reached tho Statutes 800k^.." As soon as the draft of the legislation was approved, the question •'of: seeking co-operation from the Australian Governments was gone into. Under ■ instructions from tho Govornmenti'jir.. Park and Mr. Barton left for tho. Commonwealth, the fact of their departure as well as the character of thoir mission being carefully withhold .from the public. In Australia the offi cials conferred either personally or through tho-Federal, authorities at Can boh-a . with, the Governments of New South Wales, Victoria, and South Aus tralia. Throughout the visit, from the timeof the departure of the steamer to the date of their return to Wellington, Messrs. Park and Barton were in constant communication'by means of codo messages-with tho Now Zealand Government. vWhile at soa the ofiicials employed'wireless, as a menus of communication. With co-operation successfully arranged, tho. problem of providing for simultaneous action by the. five Governments concerned had next to be overcome. Each assembly, of course, was in Parliamentary session, and each had--its-own.-legislative programme to (tarry, through. Some time was required therefore for tho selection and arrangement of a suitable date for the prcseiitation of' the legislation! Actually these negotiations occupied more "than'a month. Tho remainder of tho time; was taken up in putting the finishing touches' to the details of the legislation, in the tentative selection of inspectors, the drawing up of instructions for th"c new investigators, the issuing of advices to the banks, and the preparation of Orders in Council..' ■' : ' '..'-■ With.all theso particulars completed, WodnCsday was chosen for tabling the Commission's. report and for passing the enjergency legislation, co-incident with similar legislative action in the Australian Parliaments. APPOINTMENT OP INSPECTORS. 'Other preparations besides those connected with the enactment had to be mado' early on Wednesday afternoon. Warrants for tho appointment of the four inspectors were prepared in readiness for signature immediately the measure, was passed, and as the Bill contained a provision giving, full authority to telegraphed appointments Messrs. .Griffin and' Vickery, two of the chosen inspectors, were. dispatched to Auckland by the 3. p.m. express on Wednesday. They received notice of their' appointment by telegram after the H6uso rose, and thus were armed with the required power to commence their investigations yesterday. •Notifications had also to be sent to all the branches of the banks operating in-.New Zealand warning them when they openod for business yesterday to refuse applications for the transfer of balances-.' ' Throughout Wednesday and again yesterday; the Minister of Financo discussea developments with the Australian- authorities by means of transocean radio telephone. Some of the conversations were lengthy. It is understood that on each sido of the Tasman congratulations were exchanged on the smoothness with which the plans wore executed.