GETTING RICH QUICK

Greymouth Evening Star, 4 September 1934, Page 5

GETTING RICH QUICK

MORE “TRUST” DISCLOSURES SALES OF SHARES [BY CABLE —PRESS ASSN. —COPYBIGHT.] SYDNEY, September 3. Giving further evidence before the New South Wales Royal Commission on company promotion, Robert H. Cummings, co-liquidator of the (primary Producers’ Bank, said that he had been compelled to protest to the ’Southern British Investment Trust concerning statements that were attributed to its agents. Those statements had been a gross reflection on the liquidators of the Bank, and he had written to the company pointing out that any suggestion that the Southern British Trust were taking ovei’ the Bank’s assets was not only untrue, but was derogative to the liquidators. In reply, he said, the Southern British Company had explained that the men responsible had been dismissed, and that such incidents would not recur. Cummings explained how, on his arrival at Sydney, he was visited by a man named Long, who was an employee of the Brisbane office of the Bank’s liquidators. The latter voluntarily confessed that he had supplied lists to a friend. Cumming explained: “The whole thing was out of good-heartedness, Long being anxious to help a man who had previously worked in the Producers’ Bank and who had lost his job.” Cumming then described overtures that were made by McArthur and MeInnes for the purchase of the Producers’ Bank assets. No figure had

been mentioned, but, finally, at a conference, it had been arranged that a public accountant should investigate the position at Mclnnes’ expense. Mclnnes had guaranteed to forfeit five hundred pounds if any information were to be supplied to an outside source. The accountant had denied supplying any information other than that concerning the purpose of his investigations, which were confined to the bank’s assets. A letter was read from the accountant, repeating his assurance that he had not revealed any information relating to the affairs of the Bank. The Commissioner, Judge Haise Rodgers (to Cumming): There is no doubt in your mind that the giving away of information regarding the state of the accounts of the depositors in the Producers’ Bank to anybody outside of the employ of the Bank was a breach of trust? Cumming: Yes. Mr Monahan, K.C.: If you had suspected Mclnnes had been guilty of conduct of that sort, you would have tent him right off? Cumming:. Certainly.

ALCORN RECALLED. C. G. Alcorn was recalled. He told Mr Monahan that previous evidence which he had given concerning the purchase by Alcorn, Trower and Company of shares in the Investment Executive ‘Trust, was hot intentionally misleading. His Company had no cash at tlie time of the purchase but there were debts owing to it. He did not now .stand by the statement that the shares were brought in the ordinary way form McArthur for cash. Dr Lovat (for the Company): In fairness to Alcorn, I must point out that he said that he had no personal recollections of the transaction. The Commissioner: Surely this is a transaction of which there should be some personal recollections. Al■corn and we had just been discussing transactions in share and debenture exchanges, and I regarded this as quite different from a cash transaction. Witness: Yes, but it was different from the other transactions. Dr Lovat informed the Commissioner that balance sheets for two of tlie lesser companies had been, prepared but the remainder could not be completed before Wednesday. Alcorn, further questioned by Mr Monahan, said that he had shares in the Investment Executive Trust valued at £1675. Mr Monahan: You took the shares at first as security for a debt of five hundred pounds? What did you think their value was? Alcorn: I thought they were worth par level. Mr Monahan: How long did you have them? Alcorn: About six months. Alcorn said that MrArthur had reminded him during the luncheon adjourned that he had paid witness by cheque. Mr Monahan: Do you suggest that the shares are still in Alcorn, Trowel’s and Coy's, name? Alcorn: 1 think so. There was an arrangement between Alcorn, Trower and Coy. and myself. Mr Monahan: I take it that you paid McArthur the difference between five hundred pounds and the share value?

Witness gave no reply, Mr Monahan: On these figures you made a profit of eleven hundred? Alcorn: Yes. Mr Monahan: You say that MrArthur had given you a cheque for five hundred? Alcorn: It was paid into the Investment Securities Association, Limited, a New Zealand company. Mr Monahan: What did they want with these securities? Alcorn: That, company is really myseii. My sister and* myself are the only shareholders in Alcorn, Trower and Company. In reply to further questions by Mr Monahan, witness said that he did not transfer all of the shares from Alcorn, Trower and Coy. to himself. He left five hundred. It was not intended to sell them to anybody outside. They were sold subsequently to the Southern British National Trust. Mr Monahan: How soon afterwards? Was it more or less at the same time? Alcorn: Yes. i

QUICK PROFITS. Mr Monahan: At the same instant that you bought them! You sold them to the Southern British for seven thousand pounds? Alcorn: Yes. ' Mr Monahan: How did you come to get about seven thousand for

shares worth sixteen thousand? Does it. appear honest? Alcorn: Quite honest. To the Commissioner, Alcorn said: We sold them to the Southern British Coy. because wo were bringing about an amalgamation. It was for our mutual benefit. No one else could have bought them on the market. Witness was then questioned about the acquisition by Sterling Investments Ltd., of British National Trust Coy. debentures. He said that he adhered to the evidence he previously had given. The Commissioner: Do you know why you were given the cheque for fifty thousand pounds on Hewitt? Who decided to buy British National Trust debentures? Alcorn: I discussed it with Hewitt. I dxoxu I was told by Glasson we owed the money. , The Commissioner: Is it a fact that

in this matter, you had not personal discretion? Alcorn: Yes. We were in the hands of the Trust. The Commissioner: You mean McArthur? Alcorn: Yes. The Commissioner: You did not know much about this transaction? Alcorn: Oh yes! Sterling Investments Ltd. owed the British National Trust a large sum of money for debentures they had delivered to either Sterling Investments Ltd., or the Investment Executive Trust. Mr Monahan: Was it decided to buy out people who had invested in the Investment Executive Trust, and that your Company was made the tool to carry on the transaction? Alcorn: No. Most of the Investment Executive Trust debentures had been bought on the New Zealand

: Stock Exchange. They were to try to discredit them, and Sterling Investments was to buy them at a low market value. Mi’ Monahan: Do you remember the case of Mrs Smith to whom ten thousand was paid? Alcorn: Yes. The case was notorious. Mr Monahan: On April 19, twenty thousand worth of shares of Sterling Investments Ltd. were held by the Securities Investments Association — that is by yourself. You transferred these shares to the British National Trust. Did you get anything for them ? Alcorn: I am to get something. The Commissioner: Did you pay twenty thousand for these shares? Alcorn: They were paid up to two shillings in the pound. Mr Monahan: Why shbuld you and McArthur divide up in the Investment Executive Trust and the Southern National Trust? Did you put a shilling in? Alcorn: I got a fifth share for assisting McArthur with ideas. There is no other Investment Trust of this kind in the world. Mr Monahan: The difference between the English Trusts and this Trust is that the English Trusts debentures are backed by real capital, while your Trust is backed by nothing! Alcorn was asked why, according to the books produced in Court, ninety thousand pounds which was owing to the British National Trust at the time of the August transfer, was not shown in the July balance sheet as a liability. Alcorn replied that the balance sheet was prepared by Hewitt and ( Glasson, and he had signed it assum- . ing that it was correct. , Mr Monahan: But was it not hopelessly incorrect to the tune of fifty |

thousand? Alcorn: It would appear so—although I understood that it was perfectly correct at that time . ! . The Commissioner: Do you really understand books? Alcorn: No. While being questioned about Farms and Farmlets, Ltd., Alcorn said that certain parties in New Zealand started a Public Investors Journal, and they dug up things which were twisted about in a way detrimental to the interests of the Trust. The Commissioner: What have you to fear, if everything is in order? Alcorn: The matter was misconstrued by interested parties. Alcorn was then examined about the purchase of the former “Daily Telegraph” building, in King Street, Sydney. He said that McArthur and himself had specially benefited by the ennanced value of that building. The Commissioner: How much did you get? Alcorn: One-fifth of what McArthur received. I think that between us, we got one hundred and five thousand pounds. The hearing was adjourned till tomorrow.

£287,000 FOR NOTHING? (Recd. September 4,2 p.m.) SYDNEY, September 4. At to-day’s sitting of the Commission, Mr Monahan asked Alcorn whether the former Daily Telegraph building was bought on McArthur’s own capital. Alcorn said the capital was borrowed from Investment Executive Trust. Mr Monahan: Is there any record in the books of the Investment Executive Trust that McArthur could purchase the building for his own personal profit? Alcorn: He used the Company as an instrument of purchase. Mr Monahan: So that he could put £287,000 in his and your pockets? The Commissioner: The outcome of the transaction seems to be that without putting in a penny piece, Alcorn and McArthur have on paper at least made £287,000 profit. Alcorn was questioned regarding the list of personal drawings he had compiled at the Commissioner’s request. Mr Monahan: These book entries detailing your drawings have been entered since the Commission started? Was there no book record until then? Mr Alcorn: No. Referring to £15,000 he had made in June, Alcorn said he and McArthur had sold Investment Executive Trust shares to the Southern British National Trust in order to give the latter control of the former. There had been money owing to McArthur and himself for the establishment charges in Southern British. Mr Monahan: So actually you made £15,000 personal profit?

AMPLE COVER CLAIMED. SYDNEY, September 3. In the Equity Court to-day, Mrs Maude Nott, of Neutral Bay, Sydney, applied for an injunction against tlie Southern British National Trust, Limited, restraining it from transferring, or otherwise dealing with certain shares and Commonwealth Bonds now in the possession of the Company. Dr, Lovat, for the Company, denied that any misrepresentations were made

by the Company or by its agents in the course of dealing with Mrs Nott. He added that the' public would discover very shortly that the whole of the debenture holders were fully covered by securities, and that there was no cause for anxiety by the plaintiff. An injunction, by consent, was granted till the hearing of the suit.