McARTHUR PROSECUTION

Greymouth Evening Star, 10 August 1936, Page 2

McARTHUR PROSECUTION

PURCHASE OF YACHT

[PEB PBESS ASSOCIATION.]

WELLINGTON, August 10

The McArthur prosecution was resumed at the Supreme Court this morning, with the continuation o£ the examination-in-chief of McArthur. With regard to the power of attorney, to control Stirling Investments Ltd., he said the investment Executive Trust was advancing the funds to Stirling Investments, and the Executive Trust wished to have control. Questioned in regard to 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 of certain islands in the Pacific, principally for timber, minerals and phosphates. The building of the boat was started from share subscriptions in the Sterling Company.

The Judge here asked who were the shareholders, to which McArthur 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 its 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 j’acht, approximately £lO,OOO. He arranged to take over the yacht himself, and 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, McArthur agreed he brought the Investment Executive Trust into being really, and controlled its activities. Prior to that lie was mainly concerned in the Selwyn Timber Coy., and Redwood Forests. He was the chief ordinary shareholders of the Selwyn Timber Company. That company got into dif-

Acuities 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 McArthur in regard to the judgment of £3OOO against him on State Forest Serj vice. McArthur denied wishing to i avoid pressure, but said he wanted I time to pay. He admitted he was being threatened at the time with bank- ! ruptcy proceedings. He identified a 1 letter he wrote to the Crown Solicitor, i Auckland, enclosed with which was a statement of his financial position showing liabilities £19,240 and assets £405. McArthur admitted that the , letter was not true, but said it was fair. It was untrue beqause it did not contain the assets transferred by

him to Sterling Company, and held nominally in his son’s name. It was strictly true, because the assets were not in his name. He was being pursued by powerful financial interests, who wanted to make him bankrupt, and would have paid £3OOO to do it. There were 325,000 shares in Edge-cumbe-Cortrpany, paid up to 6/-. They were transferred to Sterling Company for £1,250. The consideration for those were practically all the assets he had besides those he put in. Cross-examined in regard to properties he then held in Grey Street and Parnell, he admitted there were mortgages on these of £6OOO, 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 bank.

A rather neat position, commented Mr- Meredith.

After further questioning, designed to force admissions that McArthur had used the money of 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 McArthur that from the

very first the yacht was intended for McArthur himself. McArthur said that was not so. It was not originally intended for him but latterly it was so. A sum of about £lO,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 1993, before she was quite finished. Mr. Meredith: She was lifted out for comfort. McArthur: 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 th6re was just a flag on it, I think.

The silver was about £5OO worth — I think it was less than that.

To further questions, McArthur said he once took her to Norfolk Island. (Proceeding).