CASE FOR CROWN

Evening Post, Issue 30, 4 August 1936, Page 11

CASE FOR CROWN

TRIAL. OF MCARTHUR

THE FIRST EVIDENCE

COMPANY ACTIVITIES

The first of the evidence for the Crown in the trial in the Supreme Court of John William Shaw McArthur, company director, formerly of Auckland, was heard today. McArthur is facing six charges relating to the issue of allegedly false prospectuses and reports dealing ,with the purpose and operations of the Investment Executive Trust of New Zealand, Ltd. The trial is taking-place before the Acting Chief Justice (Sir John Reed) and a common jury. The case for the Crown is being conducted by Mr. V. R. Meredith, Crown Prosecutor at Auckland, and Mr. C. Evans-Scott, Wellington. Mr. H. F. O'Leary, K.C., with Mr.*\R. E. Tripe, is appearing for McArthur, and the defence has the assistance of Dr. F. Louat, a Sydney barrister. The jury, which, as reported yesterday, is being kept together throughout the trial by order of the presiding Judge, is Sidney Lionel Leonard (foreman), Thomas Alfred Dodson, Ernest Walter Pyne, Norman Clayton Blackmore, Nelson Henry Law, Frederick Charles Bowkett, Bruce Hay Ether,ington. William Clarence Newton, Arthur Walden Easther, Ronald Watts, Oscar Abelgar Moller, Thomas Brown Norman. INCORPORATION OF COMPANIES. John Henry McKay, Assistant Regis-, trar of Companies at Wellington, produced the certificate of incorporation of the Investment Executive Trust of New Zealand, .Ltd., and other documents relating to this company and associated companies. The certificate of incorporation showed the Investment Executive Trust to have been incorporated on May 18, 1929. Mr. .O'Leary suggested to witness that McArth'ur's operations must have been a prolific source of revenue to his department. "Oh, yes, sir," replied the witness. Mr. O'Leary: That special legislation must have had quite a considerable effect on your revenue?— Yes, sir. TYPIST'S EVIDENCE. Madge Gregory, a typist in the Wellington Public Trust .Office, said that for about seven years from 1927 she was employed by the accused as his stenographer,. and she did secretarial duties for him, as an of the Investment Executive' Trust, whose operations she thought were controlled by McArthur. On the staff were T. R. McArthur, who was the accused's stepson, and about 28 years of age, and H. C. Glasson, the company's secretary and accountant. The books' of the Sterling Company were kept in the same offices and most at the entries in those book's until the end of 1934 were made by Glasson. The Sterling books to. February, 1934, were lost. • C. G. Alcorn used frequently to come to the office to see McArthur. W. C: Hewitt, an Auckland solicitor, at "limes acted as McArthur's solicitor.. At a meeting of the British National Trust1 in February, 1933, Hewitt was appointed secretary of the company." The .witness idenitfied the handwriting of Glasson and, Hewitt in various company books, and described the procedure adopted in the sending out of literature;-when the I Investment Executive Trust--began.' The drafts' of booklets entitled "Increasing Your Income" and "Insuring Investments" were typed by her at McArthur's dictation, she said, and the first prospectus of tlie Investment Executive Trust was- also' typed by her at Me Arthur's (Jictation, except for the memorandum pi association. The witness identified the" accused's signature on a number Nbf other documents. :Miss Gregory's evidence was interspersed ;with the reading by the Registrar (Mr. W. W. Sanson), at the request of Mr. Evans-Scott, of the contents of prospectuses, memoranda of agreement, and from other long documentary evidence formmg part of the Crown case, , Cross-examined by Mr.-O'Leary. Miss Gregory said that she-had nothing to do with the preparation of th© last Investment Executive Trust prospectus, of April 3, 1934, because McArthur was in Sydney at the time' of its issue. So far as she knew McArthur had nothing to do-with the preparation of that prospectus.' The ,prospectus of March 12, 1931, was signed by Pilkington, Hope,, and Pollard as well as by McArthur, as "directors of the ■ company. The report, of March 16, 1933, was not signed by McArthur but by W. A. Pilkington (now dead). / The prospectus of April 8, 1933, was signed by Pilkington, Pollard, and Hope, as well as by' McArthur.1 Mr. .OXeary suggested to Miss Gregory that as she had been the accused's stenographer she had probably been very useful to the Public' Trustee in her new employment. "I don't know i about being useful," replied witness. ) . Mr. O'Leary suggested to the witness that she should not be too modest. "I think.they knew all they wanted to know before I .went there," said Miss Gregory. "The inspectors had been at work." WELLINGTON MAN'S INVESTMENTS. William Edwin Redstone, of Wellington, retired insurance agent, said he had invested considerable sums in jthe Investment Executive Trust. What had interested him most was that not more than 10 per cent, of the debenture capital was to be invested in any one security. Witness gave details of the debentures taken up by him at different, times in the company. For some of the debentures , he' handed over shares he had in the Bank of New Zealand and other concerns.

Mr. Evans-Scott asked witness whether he would' have subscribed had he known that approximately one-third of the capital of the company at December 31, 1932, was invested in two associated companies. "Certainly not," replied witness.

(Proceedings)