McARTHUR’S COMPANIES

Greymouth Evening Star, 13 September 1934, Page 7

McARTHUR’S COMPANIES

SHARE-BUYING IN N.Z. TO OBTAIN CONTROL [BT CABLE —PBESB ASSN. —COtfYBIGHT.] SYDNEY, September 12. At the Companies Commission, after Hewitt had been questioned regarding balance-sheets, the Commissioner remarked: I am instructed to invest i'gat.e the companies’ activities, and I Avant to know whether the finances were in a chaotic condition right up to the appointment of this Commission. The inference one may draw at present—and McArthur does not throw any light upon it—is that, whatever may be the state of the investment register, all of the involved transactions of the various companies are simply done at McArthur’s direction, and for his own purposes. Hewitt: Ido not think so. Alcorn was recalled, and was examined regarding a transaction between the Investment Executive Trust, the Transport Mutual and General Insurance Coy.—which is its subsidiary—and the Trustees Executors Agency Coy. Witness said that the object was for the Transport. Mutual Coy. to act. for the Investment Executive Trust, and to gain substantial interest in the Trustees Executors’ Agency Company. The Commissioner: You can leave out the Transport Mutual. It‘is only a “dummy.”

Replying to further questions, Alcorn said that McArthur was to control the whole thing, but his name was not to appear as coming into the business. There was no secret, however, that the Investment Executive Trust owned all of the shares in the Transport Mutual. Continuing, Alcorn said that travellers were supplied with cash, and were sent to New Zealand with instructions to buy Trustees Executors’ Agency shares as cheaply as possible, but to buy them. The shares on the New Zealand Stock Exchange were at £3 ss, and those obtained by the Investment Executive Trust cost an average of £3 12s 6d. Replying to Mr. Monahan, the witness said that they had acquired about 45 per cent, of the shares, which, he thought, gave them control of the company. He agreed with McArthur that the present. Directors, who, he said, were more than eighty years of age, were not enterprising enough, and should be replaced. Mr. Monahan intimated that he could carry the matter no further until the balance-sheets had been completed. After further discussion, the Com'missioner said that the Commission was primarily concerned with ascertaining whether the public was properly secured for the money that it had subscribed. A second point was whether the companies had been improperly used for the purpose of personal gain by any persons connected with them, and if it appeared that those companies were being properly used. A third point was to trace where the money had gone, and. in doing so, a great number of difficulties arose.

“In regard to the two main companies,” the Commissioner remarked, “everything must be done to preserve their assets. As to some of the others, it might be a good thing if they were not continued. They have been turning themselves into all sorts of different companies, and putting so many cloaks over themselves so to speak. It is one of the abuses of the present company law. I think that a single individual can call himself “A” company or “B” compan" or “C” company, and so avoid risking a great part of his assets in any speculation or trade. If anybody can suggest how legitimate companies can carry on without being hampered, and, at the same time, how these companies, which are so liable to lend themselves to abuse, can be prevented from operating, I think the Commission may do a very great amount of good.” The Commissioner added that if Mr Monahan . intended to make any charges in regard to the management of any of the companies, or in regard to the conduct of individuals, in the course of his address at the conclusion of the Commission’s sittings, it would be fair for him to formulate them beforehand, so that the counsel interested could address themselves to such charges. Mr. Monahan said that he had fairly and plainly indicated them in his examination, but. he would do as the Commissioner had suggested. He proposed to proceed with McArthur’s examination on Monday. The Commission adjourned until Monday.