ROLLS OF BANK NOTES

Evening Star, Issue 21824, 13 September 1934, Page 8

ROLLS OF BANK NOTES

MYSTERIOUS SHARE PURCHASES OPERATIONS OF UNKNOWN BUYERS Two strangers, a bag packed with bank notes, and eager demands for trustee companies’ shares—these were the elements of a mystery in commercial circles last Easter. Who were the two men. so well endowed with the cash to do business? Where did they come from? Were they principals or agents? Why were they offering cash instead of producing bank references? Why were thej' making tempting offers to holders of shares in the Trustees, Executors, and Agency Company and the Perpetual Trustees Company? The curiosity of business men was not satisfied. The strangers carried out their transactions to the limit that shareholders would allow them, and left Dunedin as they had come—unknown and mysterious. Now the operations of the buyers have been partially uncloaked by the revelations at the companies’ inquiry in Sydney, where, giving evidence. Alcorn said that travellers were supplied with cash and sent to New Zealand with instructions to buy Trustees, Executors, and Agency shares as cheaply as possible, but to-buy them. The shares on the New Zealand Stock Exchange were at £3 ss, and those obtained by the Investment Executive Trust cost an average of £3 12s 6d.

When the two men arrived in Dunedin their identities were unknown. Evidently, they held a copy of the share register of the Trustees, Executors, and Agency Company, and approached a number of holders with a view to purchase. The ruling price on the Stock Exchange did not govern their operations. They were out to buy, at a high price if necessary. When the two men called on him, one shareholder, who Was not _ anxious to sell, oifered to hand over his shares at £IOO each. “So you don’t want to sell,” remarked the mysterious buyers, who immediately left the holder’s office.It has since occurred to the Dunedin men that the buyers did not disclose their names nor their interests, and he now laments that he failed to attempt to draw them out as to the reasons for their inquiries. , The buyers were keen. The Trustees, Executors’ shares were then quoted on the Stock Exchange at £3 ss, but offers as high as £4 5s were made. One parcel of 200 shares was passed over for £BOO —but the transfer was not sanctioned by the directors. All transactions were cash deals—on the spot. Bank bills of large denominations were used, and the transfer note was signed without delay.

But the supposed formality of the transfers being approved by the directors of the company was a stumbling block. Exercising the ample powers given in the company’s articles, the directors rigorously applied a prohibition of transfer, and during the past twelve months, according to the company’s general manager (Mr P. O. Smellie), only three transfers, embracing 125 shares out of , a total issue of 10,000 shares, had been approved. The company’s shares are well held, and the 125 shares transferred are still held in Dunedin, according to the books. The amazing cash business methods of the “ travellers ” are now revealed. When a Dunedin shareholder declined to do business with men unknown to him or in business circles he was told, that no bank references would he produced, as payment would not be made by cheque, but by cash. The buyer opened his hag, and to the surprise' of the holder produced a big roll of notes. The sale was completed without delay —but whether the Investment Trust has ever secured the shares is another matter.

The high offers made tempted several Dunedin holders, and hundreds of pounds are reported to have been handed over here. The sellers had no cause to demand to see the buyers’ credentials: they saw .the colour of the money, which was enough to satisfy. Inquiries were also made by the affluent visitors for Perpetual Trustees shares, hut their jnain mission under the cloak of anonymity was the purchase of shares in the Trustees, Executors, and Agency Company, in which the astounding statement was made before the commission in Sydney yesterday that 45 per cent, of the shares had been secured. “ The statement that the Executive Investment Trust has acquired 45 per cent, of the company’s shares is absolutely incorrect, ” said Mr Smellie, of the Trustees, Executors, and Agency Company, to-day. He reiterated the statement published yesterday that only three transfers, comprising 125 shares out of a total capital of 10,000 shares, had been passed by the directors during the past twelve months.

It was known. Mr Smellie said, that shareholders had been approached to sell their shares, blit until the transfers were passed it could not be said that the people at the back of the buying movement had acquired any interest in the company. The company’s articles gave the directors ample power to reject transfers, and this power had been and would still be rigorously, applied to prevent control passing into different hands. The board, he added had been fully alive to the situation fdr some months past. Questioned as to the number of shares for which transfers had been applied and refused, Mr Smellie declined to make any statement. He added that any official statement for the public would be made by-the board of direc-, tors.