TRUST COMPANY

Evening Post, Volume CXXII, Issue 99, 23 October 1936, Page 8

TRUST COMPANY

INQUIRY PROPOSED

POSITION OF DEBENTURE

HOLDERS

An inquiry into the methods adopted in the investigation of the affairs of the Investment Executive Trust of New Zealand was suggested by , the Public Petitions Committee of ~ the House of Representatives in a report presented to the House yesterday afternoon. The petitioners were W. R. Andrews and 36 others, and they asked for an inquiry into the proceedings during the investigation of the affairs of the Investment Executive Trust of New Zealand, Ltd. The Committee expressed the opinion that the petition should be referred to the Government for inquiry. "The committee has grave doubts as to whether justice has been done to the petitioning debenture holders," stated the report, "and recommends that an inquiry be conducted by a competent tribunal to be appointed by the Government for the purpose of making a thorough investigation into the whole field of investment and company promotion, the inquiring tribunal to report to Parliament as to the best means of safeguarding the interests of the investing public and the Dominion generally." Mr. C. H.. Chapman (Government, Wellington North) thanked the Committee for the recommendation it had made. The whole matter had been a very unpleasant episode in the history of New Zealand in recent years. Company promoting as a whole had not been inquired into when the affairs of the Investment Executive Trust were investigated. The petitioners had no complaint to make regarding the inquiry in the McArthur case, but they complained that the methods adopted caused them very serious loss. McArthur might have been guilty—he was, in fact, convicted on one count and fined £500—but that was no reason why the ■ debenture holders should be harmed. Mr. Chapman instanced the forced sale of the Trust building in Sydney, two-thirds of the asset in which belonged to New Zealand debenture holders. As a result of the forced sale the debenture holders would be lucky if they received I 12s 6d in the £ as against the estimated return of 19s 6d if other methods had been adopted. In his opinion, the Committee had brought in a wise finding. Company promotion in all its aspects should be inquired into. The public of New Zealand had been fleeced. In the present case, however, it was not a case of the public losing its money as the result of an unscrupulous promoter, but as a result of the methods adopted by the late Government. The report was tabled without further discussion.