"MCARTHUR GROUP"

Evening Post, Volume CXXII, Issue 69, 18 September 1936, Page 7

"MCARTHUR GROUP"

COMPANY ACTIVITIES REFERENCES IN AUCKLAND CASE '" (By Telegraph.—Press Association.) AUCKLAND, September 17. Further information about the formation and activities of a number of companies belonging to what is-known as the "McArthur group" was given during the hearing of the Hedwood Forests case in the Supreme Court today. Mr. K. C. Aekins, solicitor, said he had been chairman of directors of Sterling Investments from its incorporation and still was a director. His codirectors had been C. G. Alcorn and Glover Clark, but Clark had resigned after about two years. No cash was subscribed by shareholders at any time, and as far as he knew the cash to start the company came from the Investment Executive Trust. McArthur and Alcorn really ran the company, and dictated all its policy and carried it out. He never did anything on his own initiative, but on the instructions of McArthur or Alcorn.

Witness', said he knew Sterling was buying Investment Executive Trust debentures, and these were being bought - by V. B. Mclnnes and Company and being taken over by Sterling, He understood the object of buying those debentures was to keep up their price. He remembered some transactions dealing with McArthur's Hillsborough property and he thought Sterling took it over and also some Newmarket property that belonged to McArthur. Witness identified signatures on a cheque of February 28, 1934, of Sterling Investments to J. W. S. McArthur for £60,000 and also a cheque of the same date.for £60,025 drawn by Wynwood Investments in favour of Sterling. ,'.'»» Mr. Johnston (for the defendants): I would like to see a cheque of this size. Mr. Barrowclough (for the plaintiffs): My friend has not been long enough in this case or he would have seen dozens of them. That's a mere bagatelle. Norman Alexander Duthie,. public accountant, said he was one of the inspectors appointed by the Government to investigate the affairs of the' various companies. Witness described the origin of Kotahi Lands and said Edgecumbe Forests acquired all the shares in the Kotahi company. Witness said that in May, 1931, 21,224 acres were sold to Timberlands Woodpulp, Limited, for £33,350. Timberlands gave a mortgage back for £28,350, leaving £SOOO which was apparently paid in cash. The Edgecumbe company was wound up in March, 1933, and the books handed to the Sterling company for safe custody. When £SOOO was paid back off the Timberlands mortgage it was in part distributed in loans free of interest to shareholders, and loans of £3O 8s and of £750 were made to McArthur. Witness traced further repayments of £SOOO off the Timberlands mortgage and said £ISOO and £IOSO were advanced.to T. R. McArthur, who he believed was the son of J. W. S. McArthur. -v.: Sums of £4600, £7750, and £9OO were lent to Sterling Investments. •\"The Sterling company"'said witness, "on: March 6, 1933, paid , Edgecumbe .£19,300 in,the purchase, of 4ts assets; "" This was two days later lent back to the Sterling company on deposit at call at 3£ per cent. This £19,300 unsecured loan was an asset of the company and passed as such into the liquidator's hands." The hearing was, adjourned.