COMPANY INQUIRY

Evening Post, Volume CXVIII, Issue 53, 31 August 1934, Page 9

COMPANY INQUIRY

EVIDENCE OF EXPERT

AMAZING STATE OF AFFAIRS

M IDEA OF POSITION

t.'nited Press Association—By Electric Tele-

graph—Copyright.

SYDNEY, August 20,

I'iie Boyal Commission inquiring into the operations ~of seventeen trust companies sat for. only . a brief ' period today, the.sitting being delayed until after the funeral of Sir Edgeworth David, and then, adjourned, until Mon- ' day. ■' - ■ ■■"'■.■.

. Dr. Louat, who is appearing for, the British .National Trust, Lid., the British National Investment Trust, Ltd., and the Sterling Investments Company of. New Zealand, called JGdgar Woifenden, chartered accountant, who' gave evidence that if one of■; the companies' accountants could continue during the weekend the task of j -the preparation of balance-sheets, which was ordered by the Commissioner, Mr. Justice Halse Rogers, these should be ready by next Wednesday. ~■.':■.■ Dr. Liouat intimated that Glasson was suffering : from influenza and consequently the auditors were hampered. Mr. Wolfenden at a later stage said that owing to the dovetailing of transactions the work was a little more involved than ordinarily. ' It was also necessary to write up ;i list of investments.

Mr. 'Mfluahan, who ;is assisting the Commissioner, Risked the witness: Even you, ,as an expert, 'would: at: the ■present ; time ;.be totally imablo,to form any" idea of tho. p'ositioii./of .'the comlpam.es? ' '','' "■ ' ■ *".■'.' P:v:'"' :\' .

Witness: .Yes.

Mr. Monahan: I take it that-'for companies, dealing with; public .funds that State, of; affairs is amazing?

Witness: Yes, quite,

Dr. Louat said that Mr. "Wolfendcn would at a later stage be called in regard to the system in .use.

SYSTEM OR XACK OF SYSTEM. Tho Commissioner: Lack of system, I should think. , •

Keplying to Mr. Monahan, tho witness said that his assistanco was invited- by the companies about a fortnight ago.

The Commissioner: I do not feel inclined to grant an adjournment beyond Monday. After all, tho companies intimated that they courted the fullest inquiry and they should be ready at any time. It should be possible to proceed with tho examination of McArthur and Aleorn.

Mr. Monahan replied: I shall be ready by Moriday. The two biggest companies concerned are the Investment Executive Trust and the South British National Trust, but.the operations of the smaller companies are very restricted. . _ ■ \.

~ The Commissioner: Tho public will first of all be anxious to obtain a list of investments by these companies affording security for their money. Dr. Louat then directed attention- to Mr. I. , Macfarjan's. statement in the Victorian Parliament to the effect that some companies had got rid of their books for .the purpose of hampering the inquiry. ,D,r. Louat gave- that an unqualified denial:so far .as this State is concerned. ~

The Commissioner: I suppose. you want that made public, There is specific evidence before ..-me. that books were removed from New-Zealand. I think Hewitt and Glasson were concerned with a company that had no dealings over here, but had its books removed here. . ■'..

: The Commission adjourned _ until Monday, the Commissioner directing Dr. Louat to supply particulars of tho personal drawings of Alcorn. and .MeArthur, which should not involve tho •writing up of books. '• ':'.■■ .

The Attorney-General of Victoria, Mr. I. Maefarlan, speaking-on the-Com-jpanies (Special Investigations) .'Bill in the Legislative Assembly, said in.reference to one of the companies concerned: The gist of the report shows that the scheme outlined in its prospeptus is extremely ingenious, but, to my mind, a gigantic frauds The position is that in places outside Victoria these companies are operating in an extensive fashion. In places where investigations aro being conducted the books are being got ria of to hamper inquiry, and it is not improbable that some of these books will find their way to Victoria. , , ■ • ' ■

THE VICTORIAN INQUIRY

; MELBOUBNE, August 30. The inquiries in-.-Victoria under the special Act passed by the Legislative Assembly will not.be made by a Koyal Commission, but will be conducted by competent inspectors,'and the Bill authorises prosecutions if advisable and legal action to have companies wound up. .;■■'-

SCOPE OF COMMISSION

TWO COMPANIES ADDED

(Keeeived August bl, 1 p.m.)

SYDNEY, Thjs Day. The Executive Council has decided to extend the scope of the1 Boyal Commission into certain companies by the addition .of the British Medical Investment Trust, Ltd., and British Consolidated Investments, Ltd.; . ' -

WAS THERE LEAKAGE?

TRUST COMPANY LEGISLATION

QUESTION IN HOUSE

An assurance that, there had been no. official leakago of information regarding the intentions of the Government in respect of legislation affecting the operations of trust companies was given by tho Minister of Finance (the Kt. Hon. J. G. Coates). in tho House of Representatives last, evening, when replying to a point raised by Mr. K. Semplo (Labour, Wellington East). Mr. Seniple asked Mr. Coates,if it was a fact that fourteen days before tho legislation was introduced into the House brokers representing companies opposed to the McArthur group were in a position to warn shareholders of what was going to happen. If that was true, then the House had been deceived, and it was obvious that someone had given information away. The brokers must have been informed exactly of what the Government pro-! posed to do, and", he would like the Minister to say exactly what he knew about it.

Mr. Ooates: What is the- point? Is it suggested that the Government gave tho tip to these people? Mr. Scmplo: I am not suggesting that. lam just wondering how the information got out, « . Mr. Coates said ho could not answer any suggestion that somebody had been giv.cn information, but Mr. Semplo could be perfectly certain that it had not come from any official source. Tt was equally true to say that the fact that Mr. Barton (tho chairman of the Companies Promotion Commission) and .Mr. Park (Secretary to the Treasury^

went across to Australia was noted by st>veral very shrewd people. There was no question about that; everybody \-as ou tho gui vive. So far as the operations of tho companies wore concerned, it was for the Courts to decide whether they wore within tho law or outside of it, and not the Government. Quito a number of queries were made in Wellington as to what was happenin.'; and ho had told those making the inquiries not to ask questions. So far as ho was concerned not the slightest piece of information was given ,to anybody;, ■ - ._ '