N.Z. LOAN AND MERCANTILE AGENCY COMPANY.

Evening Star, Issue 9387, 8 May 1894, Page 2

N.Z. LOAN AND MERCANTILE AGENCY COMPANY.

JUDGMENT OF THE COURT,

[Feb Pbess Association.]

LONDON, May 7. (Received May 8,1894. at 10.50 a.m.)

Justice Williams in his decision re the New Zealand Loan and Mercantile Agency Company states that, despite the evidence of tho Right. Hon. A. J. Mundella, he thought tho statements of the other directors correct-—that counsels' opinion with regaid to the alterations in prospectuses in 1879 had been submitted to the Board, and that counsels' opinion had been based on tho case prepared by Mr Thomas Russell. Judge Williams considers that Mr Falconer Larkworthy had been a valuable and trustworthy servant, and if he had been allowed control, and not forced to leave, the company would probably still have been in a solvent position. Tho later balance-sheet was positively misleading. It was evident that the directors had not doubted Mr Larkworthy's report, which he (the judge) held had placed the directors in full possession of tho condition of the company's properties, but the directors had not disclosed this information to the shareholders. It was apparent, ho thought, that Mr T. Russell had acquiesced with Mr Elder (the Australian manager) and Mr Paul (the London manager) in the telegram suppressing Mr Elder's report on the Australian properties. There appeared to him no satisfactory reason why the directors should not have informed the debenture-holders earlier of their insecure position. The directors, too, ought to have noticed the irregularity of placing the investment in the Land Company's shares under tho heading of " wool and produce." The auditors had failed in their plainest duty, and they ought not to have signed the balance-sheet of 1892 until a substantial amount had been written off. Judge Williams said he considered the advance to the Land Company was to save the Land Company and Mr Thomas Russell from liquidation.

[Special to Press Association.]

LONDON, May 7. (Received May 8,1884. at 1 p.m.)

Judge Williams stated that apparently the system of suppression adopted iu London was for the object of throwiug a strong light upon the olliccrs' estimate of the directors.

The 'Standard,' referring to the commercial morality of tho officers, states that they received no benefit from tho transactions or by the withholding of the reports. It considers that the investment in the Waikato land was bad, and favored Mr Thomas Russell, whilst it protected the Loan Company's directors, who were interested.