M'ARTHUR CHARGES

Evening Star, Issue 22413, 10 August 1936, Page 8

M'ARTHUR CHARGES

ACCUSED CROSS-EXAMINED BY CROWN ALLEGES “ HOUNDING " BY FINANCIAL INTERESTS [Per United Press Association.] WELLINGTON, August 10.

The M'Artbur prosecution was resumed in the Supreme Court this morning, with continuation of the cxamma-tion-in-chief of M‘Arthur. In regard to power of attorney to control Sterling Investments Ltd., he said the Investment Executive Trust was advancing, funds to Sterling Investments, and the Executive Trust wished to have control. Questioned regarding the transactions whereby he got the yacht Morewa, he said the Pacific Exploration Company was formed chiefly for exploratory purposes. In connection with the building of the yacht to explore the possibilities in "certain islands in the Pacific — principally timber, minerals, and phosphates—the building was started from share subscriptions in the Sterling Company. The judge here asked who were the shareholders, to which M‘Arthur replied : Sterling Investments and a few nominal shareholders in the Investment Executive Trust, which was really Alcock and himself. He did not think there were any other shareholders in the Investment Trust at that time. The project was abandoned in the early stages, because it was evident that, with the growth of the trust, it would be impossible for him to consider any exploration work. Money was owing to Sterling Investments for the' construction of the yacht, approximately £IO,OOO. He arranged to take over the yacht himself, and to assume the liability of the cost. The debt was eventually cancelled when he cancelled his Sterling debentures. The yacht was thus paid for by him.

Cross-examined by Mr Meredith, M'Arthur agreed that h© brought the Investment Executive Trust into ing really and controlled its activities. Prior to that he was mainly concerned in the Selwyn Timber Company and 1 ted wood Forests. He was the -chief ordinary shareholder of the Selwyn Timber Company. That company got into difficulties, and went into liquidation in June, 1930, he thought. He admitted there were substantial liabilities, but said there were very substantial assets also. Mr Meredith went on to question M'Arthur in regard to a judgment of £3,000 against him on the State Forest service.

M'Arthur denied wishing to _ avoid pressure, but said he wanted time _to pay. He admitted that he was being threatened at the time with bankruptcy proceedings. He identified a letter h© wrote to the. Crown Solicitor, Auckland, enclosed with which was a statement of his financial position, showing liabilities as £19,240 and assets £405. M'Arthur admitted that the letter was not true, but said it was fair. It was untrue because it did not contain assets transferred by him to the Sterling Company, and held, nominally in his son’s name. It was strictly true because the assets were nob in his name. He was being pursued by powerful financial interests who wanted to make him bankrupt, and would have to pay £3,000 to do it. There were 25,000 shares in the Edgecumhe Company paid up to, 6s. They were transferred to the Sterling Company for a £1,250 consideration. Those were practically all the assets he had besides those lie put in the letter. Cross-examined in regard l to the properties he then held in Grey street and Parnell, he admitted that there were mortgages on these of £6,000, and that ,he got them back free of, mortgage through the Wynward transaction, by a round of dealings which he admitted virtually made him receiver for the assets of his own company, and that the creditors in the Selwyn Timber Company were placed in the same position in relation to himself as formerly they were to the hank.

“ Rather a neat position,” Commented Mr Meredith. • After further questioning, designed to force admissions that M‘Arthur had used the money of the companies to his own advantage, Mr Meredith went on to question him in detail as to the nature and fittings of the yacht Morewa. He put it to M'Arthur that, from the very first, the yacht was intended for M'Arthur himself. M*Arthur said that was not so. . It was not originally intended for him, but latterly it was so. The sum of about £IO,OOO for the yacht came from the realisation of his own assets and from the Investment Executive Trust. It came from the funds of Sterling. He took the Morewa over in December before she was quite finished. Mr Meredith: She was fitted out for comfort ?

M‘Arthur: She was well fitted out. Mr Meredith: I think she had her own special silver? —Yes. What was the . inscription on the silver?—The inscription there was just a flag on it. ' I think the silver was about £SOO worth?—l think it was less than that. To further questions, M‘Arthur said he once took her to Norfolk Island.