THE COMPANY INQUIRY

Evening Star, Issue 21835, 26 September 1934, Page 9

THE COMPANY INQUIRY

NEW SOUTH WALES COMMISSION TIGHTENING UP OF ACT URGED Proas Association—By Telegraph—Copyright SYDNEY. September 25. At to-day’s sitting of the Royal Commission which is inquiring into the activities of certain trust companies Mr A. Spencer Watts, representing the Sydney Chamber of Commerce, recommended, with a view to preventing the exploitation of the public by companies with insufficient capital, that a minimum percentage of the nominal capital should be paid up before going to allotment. His association considered it imperative that subsidiary companies should be compelled to publish accounts. “ The New Zealand Act has failed to stop abuses, although it is an up-to-date Act,” added Mr Watts. The recommendations by the Sydney Stock Exchange were of a similar nature. The city valuer, in giving evidence relating to the value of the Trust Building, said that at tbo present time it was £289,900. The value of the land had risen from under £78,000 in 1932 to nearly £90,000. Mr John Macfarlane Elliffe, of Auckland, public accountant, said he had been directed to make an investigation into the affairs of the companies which were the subject of inquiry by the commission. He said it appeared from the transactions of Wymvood Investments and Sterling Investments that M'Arthur had acquired assets totalling £109,395 by handing over sixty British National Trust debentures. Sterling and Investment Executive Trust accounts had been squared up in 1933. but that operation had not included £22,000 which went from the Investment Executive Trust to a special Sterling account operated solely by M‘ Arthur. Mr Monahan (Assistant Commissioner) : That is it. It requires special legislation to remove these officers. I shall have seriously to consider whether or not I shall recommend it. If it also takes special legislation to stop what has practically been mishandling of trust funds, then I shall have to consider special legislation for the reinvestment of money. lam not satisfied with Sterling. What we want to trace, and we also want to find, is where there is any record of the £5,000 with which that account was opened. The Commissioner: There is no doubt that the condition of such books as are available will call for grave comment. I am getting less and less information about really important vital matters affecting these companies. If it requires special legislation to remove these officers I shall have seriously to consider whether or not I shall recommend it. If it also takes special legislation to stop what practically has been mishandling of trust funds, then 1 shall have to consider special legislation for reinvestment of the money. I am not satisfied that Sterling’s books could not have been produced. The Commissioner added that he did not propose to close the commission until he had received a document showing how much money had gone into tho Investment Executive Trust. He was going on the circuit on October 8, so that if a document had not then been prepared a long adjournment would be unavoidable. If necessary he would make an interim report. Dr Louat objected to Elliffe being further examined, maintaining that the £22,000 could be explained by certain transfers of shares from Edgecumbe Forests to Sterling. He asked that the remainder of Elliffe’s evidence lie postponed for a few days. The Commissioner said he wanted to know how much M ‘Arthur had made by using Investment Executive Trust money to protect himself from personal attacks. From the evidence it appeared that two and a-half years ago M’Arthur had been unable to pay his debts, yet he had come through tho crisis and acquired considerable assets since. There was no available record of the position of Sterling during that period, and he wished to know where they obtained their money. The commission adjourned till to-mor-row. TO-DAY’S SITTING. *4 SYDNEY, September 26. U (Received September 26, at 1.35 p.m.) At the commission this morning H. C. Glasson (secretary of Executive Investment Trust) was being examined on matters connected with some of the companies. The inquiry is proceeding.