M'ARTHUR GROUP

Evening Star, Issue 22810, 19 November 1937, Page 14

M'ARTHUR GROUP

LAST LIQUIDATION MEASURE “ FINAL SCENE OF UNPLEASANT EXPERIENCE " [Per United Press Association.] WELLINGTON, November 18. Moving the second reading of the Companies (Special Liquidation Extensions) Bill in the House, the Minister of Finance, Mr Nash, stated that the Bill referred to the First Mortgage Freehold Security Company of New Zealand Ltd., one of the M‘Arthur companies, for which under the Bill the Public Trustee is to act as liquidator, as the case of other companies in the group. Mr Nash stated that there were only two directors of the company specific in the Bill—G. T. Alcorn and a Miss Alcorn. The company was nothing but an agency for robbing people who did fiot understand what they should do with their savings. It was linked up to some extent with a number of other companies which had been already dealt with. It bad issued debentures to some 82 people, and its original nominal capital was £I,OOO. Then it was increased to £IO,OOO of 6,000 pound shares, and 100.000 shilling shares. The actual subscribed capital was £1,205, and only £25 was paid up. The company then proceeded to issue debentures to the extent of £IOO.OOO. In all 764 debentures were sold, bringing in £19,100. Another company, Investments Security Ltd., was next organised to sell debentures, and it received about £1,200 commission. 'Phe Minister proceeded to deal with the ramifications of this and associated companies in their dealings with a. property bought for £3,512 by the wife of the man. who promoted the original company. The profit was £28,347- The Minister’ continued that something should be done to safeguard the savings of people, particularly from persons who went from door to door selling debentures. He thought the best course was for people with normal savings to leave their money in the Post Office Savings Bank. Those with larger amounts should ■ invest in Government or local body securities, or, if they wished for other forms of investment, they should consult their bankers or Stock Exchange brokers. That did not mean that every security on the Stock Exchange was sound, but that crooked work of the type he had outlined would not have been possible if the people concerned had first thought of consulting a banker dr Stock Exchange broker.

Mr Coates said the whole business was regrettable, but it was doubtful if the Government could have foreseen what was going to happen. The legislation before the House was the final scene in a very unpleasant experience. Mr Hamilton discussed trustee operations, and said there had been a bit of a mix-up between all the private and public trustees. is, would be a good thing if they could originate some scheme to regulate trusteeships in the interests of investors.

The Bill was read a second time, passed through the committee stages without amendment, and was passed.