COMPANY INQUIRY

Evening Post, Volume CXVIII, Issue 96, 20 October 1934, Page 9

COMPANY INQUIRY

FUTURE OF DEBENTURES

COMMISSIONER'S COMMENT

POSSIBLE PROCEDURE

United Press Association—By Electrlo Tele-

graph—Copyright.

SYDNEY, October 19,

Special representation of groups of debenture holders was a feature at the resumption of tho inquiry by the Koyal Commission, under Mr. Justice Halse Rogers, into trust companies' activities. In addition to Mr. Abrahams, K.C., who put in ;i petition from a certain group, another counsel, Mr. Solwyn Betts, said that ho had substantially tho same instructions from another group of debenture holders. The Commissioner said'that any help from people submitting the views of debenture holders would be very acceptable.' Mr. Bryan. Fuller,' on behalf of the Investment Executive Trust of New Zealand, Ltd., and Sterling Investments, said that he had no objection to representatives of debenture holders appearing, but a frank statement should be made before counsel were allowed to appear. He had been informed that debenture holders had been approached in Brisbane with a suggestion that they hand over debentures in exchange for shares in another company controlled by a, person who appeared before tho Commission, and tlint one of the directors of the company was agent for MeInnes. The Commissioner said that he would j not support any suggestion that any company with which Melnnes had any connection should have anything to do with taking over the affairs of the companies. SCHEME FOR TRANSFER. Mr. Fuller said that-one of the directors of the company to wliicb. he had referred was Foster. 'The scheme was that debenture holders in the Southern British National Trust should hand over debentures in exchange for shares in another company, and that the Commissioner should value the debentures and get debenture holders to hand them over to this other company. The Commissioner: I am not going to do anything like that, whatever happens. One of the main objects of this Commission is to try to preserve the interests of people who invested money. The Commissioner added that it appeared to be necessary to call deben-ture-holders' meetings, but he did not know who would bear tho cost of circularising all debenture holders with copies of his findings on the facts. Mr. Abrahams stated definitely that he did not represent the Melnnes interests. "On information I have at. present, there is bitter hostility to McInnes," ho said. "As regards' Foster, I have never- heard his name.'' The Commissioner said that he thought debenture holders should be warned to be very careful about accepting suggestions to put money into any company on the basis that it be authorised by the Commission to tako over the assets. It would not be competent 'for tho Commission to make such a proposal, and there was very little likelihood of the- Legislature adopting that method of settling the affairs of the companies. Ho would probably recommend to tho Government that a receiver of assets, as far as they came within tho jurisdiction of New South Wales, should be appointed, so that, during the time steps were being taken to ascertain the desires of debenture holders, there would be no possibility of tho assets being dealt with in any way. MR. HAMPSON'S CASE. Mr. H. S. Nicholas appeared on behalf of tho New Zealand Government, and submitted that transactions which wore tho subject of cables between Mr M. H. Hampson and the Commission should not be inquired into by the Commission Mr. Hampson, a New Zealand solicitor, said that ho wished to contradict statements made in the Now Zealand Commission's report. The Commissioner said that ho could not accept the position of judge botween tho New Zealand Commission and Mr. Hampson. Mr. Hampsou proceeded to make a statement about Redwood mortgages when the Commissioner remarked that it appeared to havo nothing to do with what ho was investigating. "If you don't choose to give this evidence before tho New Zealand Commission it seems extraordinary that you want to give it before me," he said. The Commission adjourned until Monday. ■