M'ARTHUR TRIAL

Evening Star, Issue 22414, 11 August 1936, Page 8

M'ARTHUR TRIAL

TELEGRAPH BUILDING DEAL SOME PASSAGES WITH JUDGE [Per United Press Association.] WELLINGTON, August 11. The M'Arthur prosecution was continued to-day. lie-examined by Mr O’Leary, M Arthur said he attended continuously the whole five months of the commission of inquiry at Sydney, and gave evidence for six days. He was cross-ex-amined by three different counsel, who had the assistance of four chartered accountants, and all the various matters were brought out in detail at much greater length than in the present proceedings. In October, 1935, one of these charges was laid against him. Mr O’Leary proceeded to question M'Arthur in regard to comment in the ‘ Investors’ Journal.’ _ M'Arthur said the journal had consistently attacked him, and circularised the Stock Exchanges asking assistance from the exchanges and brokers, _ and stating that if they did not assist they would live to regret it. He believed the Stock Exchange brokers afterwards subscribed to the journal. The second auditor of the company was_ in Sydney under subpoena the whole time of the commission, but was not called._ Mr O’Leary proceeded to bring up the matter of the meeting of debenture holders held at Christchurch, and one a few days before at Wellington. The Judge questioned what bearing the views of the Wellington meeting could have. Assuming they passed some resolution, though not fully informed, what value had any resolution they Mr O’Leary went on to question M‘Arthur in regard to the loan of the 8.N.1.T. for the purchase of the Trust Building. He recalled the judge’s remark of yesterday that the transaction was on a par with an office boy taking 2s 6d from the till to put on the Grand National.

M‘Arthur: It is not parallel, because in this case the £50,000 advanced to the 8.N.1.T. was a temporary loan on security. The loan was repaid with interest, and was always secured. The Judge: Are you going to suggest that if any person buys a cottage for £SOO on which there is a mortgage of £250, and if he. gets anyone foolish enough to lend £250, that person is fully secured ? Mr O’Leary said he would be if the property was secured at under its value. . The Judge: How many people in New Zealand have lost everything in that sort of transaction? Mr O’Leary: As events turned out, M'Arthur was right. The Judge; That has nothing to do with it. It is just the same as the office boy with the 2s 6d. If the horse wins and he gets 7s 6d and puts the 2s 6d back in the till, he commits the offence just the same. Mr O’Leary: What offence? The Judge: Of taking 2s 6d he had no right to. The Judge said it was not strictly a breach of the criminal law for a trustee to commit breach of trust, but the distinction between breach of trust and theft was very slight. There was a distinction without a difference. Breach of trust might be a criminal offence, but it was not necessarily a criminal offence. Mr O’Leary (to M'Arthur): As events turned out was' there any risk at all? . , . M'Arthur: “There was no risk at all.” He purchased the building at a third of its value at a sale that was a forced sale. The Government valuation of the land alone was £93,000, and a leading valuer’s estimate of the land alone was £160,000, which was more by £60,000 than the price he paid for both land and building. He spent £115,000 on it after buying it. The Judge asked were they to have the price realised on the recent sale—not that it mattered, but the sale had been mentioned in the case, and the jury might like to know. Mr O’Leary said the cabled advice (it was subject to confirmation) was £273,000. Mr O’Leary (to M'Arthur); That is being fought by you, even at that price? M'Arthur; I say that is £150,000 below the value, because the'' building could not be replaced to-day for £450,000. M'Arthur said the building was bought by the 8.N.1.T. Mr O’Leary: Could you have carried out the transaction in any other way? . , . M'Arthur; I could have earned out this transaction _ dishonestly by getting a dummy to do it and taking the whole of the profit. , , At all times, he said, he had disclosed his dealings in connection with purchases, and consideration and security were always given. Mr O’Leary called two accountants —Robert Arthur Glen and Donald Gordon Johnston —to give evidence regarding, and to identify, the statements he put in to show the wide distribution of assets of the Investment Executive Trust at various dates from March 16, 1933, to April 3, 1934. The case was then closed, and counsel is now addressing the jury.