TRUST COMPANIES

Evening Star, Issue 21824, 13 September 1934, Page 9

TRUST COMPANIES

THE AUSTRALIAN INQUIRY FURTHER EVIDENCE TAKEN Pross Association —By Telegraph—Copyright SYDNEY, September 12. After Hewitt bad been questioned with regard to the balance-sheets, the Commissioner (Mr Justice Halse -Rogers) remarked: “I am instructed to investigate the companies’ activities, and I want to know whether the finances were in a chaotic condition right up to the appointment of the commission. The inference one may draw at present —and ARArthur does not throw any light upon it—is that, whatever may be the state-of the investment register, all of the involved transactions of the various companies are simply done at M'Arthur’s direction and for his own purpose.” Hewitt: 1 do not think so.

Alcorn, who was recalled, was examined with regard to a transaction between the Investment Executive Trust, the Transport Mutual and General Insurance Company (its subsidiary), and the Trustees, Executors, and Agency Company. Witness said that the object was lor the Transport Mutual to act for the Investment Executive Trust and to gain a substantial interest in the Trustees. Executors, and Agency Company. The Commissioner; You can leave out the Transport Mutual. It is only a dummy. ' . Replying to further questions, Alcorn said M‘Arthur was to control the whole thing, but his name was not to appear as coining into the business. There was no secret, however, that the Investment Executive Trust owned all the shares in the Transport Mutual. Continuing. 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, hut to buy them. The sliares on the New Zealand Stock Exchange were at £3 ss, and those obtained by the Investment Executive Trust cost an acerage of £3 12s 6d. Replying to Mr Monahan, witness said they had acquired about 15 per cent, of the shares, which he thought gave them control of the company. Ho agreed with M'Arthur that the present directors, who, he said, were more than eighty years of age, were not enterprising enough, and should be replaced. Mr Monahan then intimated that he could carry the matter no further until the balance-sheets had been completed. After further discussion the Commissioner said that the commission was primarily concerned with ascertaining whether the public was properly secured for money it had subscribed. The second point was whether the companies had been improperly used for the purpose of personal gain by any persons connected with them, and if it appeared that those companies were being properly used. The third was to trace where the money had gone, and in doing so a great number of difficulties arose. “In regard to two of the main companies,” the Commissioner remarked, “ everything must be done to preserve their assets. As to some of the others, it might be a good thing if they were not continued. They have been turning themselves into all sorts of different companies and putting so many cloaks over themselves, so to speak. ’ It is one of the abuses of the present company law, I think, .that a single individual can call himself A Company or •B ’ Company or ‘O’ Company, and so avoid risking a great part of his assets in any speculation or trade. If anybody can suggest how legitimate companies can carry on without being hampered, and at the same time how these companies, which are so liable to lend themselves to abuse, can be prevented from operating, I think the commission may do a very great amount of good.” , Tho Commissioner added that n Mr Monahan intended to make any charges in regard to the management of any of the companies or in regard to tho conduct of individuals in the course of his address at tho conclusion of the coinmission’s sitting, it would be fair folium to formulate them beforehand so that counsel interested could address themselves to such charges. Mr Monahan said he fairly and plainlv indicated them in his examination, but he would do as tho Commissioner had suggested. He proposed to proceed with M'Arthur’s examination on Monday. The commission adjourned until Monday. HEW ZEALAND BONDHOLDERS t STATEMENT BY MR COATES. WELLINGTON, September 12. In the House of Representatives this afternoon Mr C. L. Carr, the Labour member for Timaru, asked the Minister of Finance whether he was taking any steps to conserve the interests of the debenture and bondholders of the various companies dealt with in the interim report of the Companies’ Commission. Members, lie said, were being besieged by constituents whose interest payments were being withheld. The Minister of Finance (Air J. G. Coates), in reply, said: “The Act places no restriction nor imposes any penalty on remittances of money within New Zealand, and if a company has funds in New Zealand properly available for the purpose there is no reason that I am aware of why the interest to New Zealand debenture holders should not be paid if it is due.” Mr Carr asked if the Minister would do anything to help people to get their interest, but Mr Coates did not reply. ■