Supreme Court Inquiry Into Company Case

Greymouth Evening Star, 17 August 1948, Page 2

Supreme Court Inquiry Into Company Case

(P.A.) CHRISTCHURCH, This Day. An inquiry into the affairs of the Southern Cross Construction Co., in liquidation, was begun in the Supreme Court today. William Samuel Newburgh, a company director, and Peter Belford Watts, a public accountant, appeared on a summons under section 216 of the Companies Act to show cause why they should not be debarred from acting as company directors or being concerned in the management of a company for such a period, not exceeding five years, as the court might order. Mr Justice Fleming presided. Mr G. G. G. Watson, with him Mr A. C. Perry, appeared for the official assignee ,and Mr T. P. Cleary, with him Mr T. A. Gresson, for Newburgh and Mr E. S. Bowie for Watts. The current’ proceedings follow the hearing on June 23 when, on behalf of the official assignee as liquidator, Mr A. W. Brown said Newburgh and Watts had supplied the official assignee with certain information which he would have sought at a public examination, which, therefore, was not now necessary.

Opening the case for the official assignee, Mr Watson said the applications were based on allegations of fraud made in the assignee’s report. The action was brought not by way of punishment but as a protection to shareholders. «, Mr Watson said the proceedings were based on two specific charges of fraud. Primarily, the defendants, while acting as directors, improperly manipulated the moneys of the company to give preferential treatment to Newburgh, who was actually an unsecured creditor, and also that the defendants, knowing the company was unable to pay its debts, incurred further debts. (Proceeding)