WHOSE MONEY ?

Grey River Argus, 23 August 1934, Page 5

WHOSE MONEY ?

COMPANY INQUIRY

McARTHUR’S PROFITS On Paper Transactions (Aus. & N.Z. Cable Assn.) I Received August 22 at 8.30 p.m.) SYDNEY, August 22. The Royal Commission inquiry into trust companies was resumed to-day. Explaining services rendered in compiling records and statistics Glassou said that though the Company was not floated until 1931, much valuable preliminary work had been done by Alcorn and McArthur, vno had been paid £485 and £1630 respectively. Mr Mon han K.C.: “So that nvoney was paid out of the debenturesholders’ money! Wene the debenture holders informed ?' ’ Casson: ‘‘ Ye* ’’ 'rhe Commisisoner: “Were McArthur and Alcorn employed for that preliminary work ? ' ’ Glasson; “Yes.*’ The Commissioner; “Have you a record of that?’’ Glasson: “I don’t know.” AUDITOR’S RESIGNATION. Glasson said that the auditor, in 1933, had refused to sign the balance sheet, having taken exception to a s<tatistical records entry. An item of twelve thousand pounds had bce,n specificaUy objected to, and also innamely thirty-six thousand pounds in Sterling Investments, Ltd., end fifty-two thousand pounds in the British National Trust. The Auditor conferred with the Directors, but as no agreement was reached he (the Auditor) resigned. A fresh balance sheet, in which material adjustments were made, was drawn up, and an other Auditor was appointed.

The Commissioner: “Was thi* money all paid out of the debentureholders’ capital?” Glasson; “Yes. They -were repaid by the receipt of debentures in the British National Trust.” £5 WORTH! Continuing, Glasson said that about twenty-three thousand shares in the Investments Executive Trust had been taken up by the public. The total issue of shares was 244 thousand, including the holdings of McArthur,, approximately thirty-nine thousand; Alcorn, nine thousand; and the British National Trust, 194 thousand. Air Monahan: “How much actual money was subscribed?’’ Glasson: “Five pounds.” AN ALLOCATION TO McARTHUR. Mr Monahan: “Tn May. 1933. some 193,400 shares were alloted to McArt hu r? ’ ’ Glasson: “Yes.” Mr Monahan: “Was that by resolution of the Directors?” Glasson: “Yes.” The Commissioner: “Was a cheque leceived for these shares?’’ Glasson: “There were two deposits and one withdrawal.” Air Monahan; “Why is there a difference between the date of the share t.-ansaction and the cheque transaction?’’ Glass'on: “I cannot just remember the circumstances.” Mr Monahan: “They were paid for before they were applied for and allotted. Do you think they were true entries in the books?’’ Glasson: “I do.”

MCARTHUR’S TRANSFER. Air Monahan: “In April, 1934. AlcArthur transferred 155.320 shares to the Southern British Trust?” Glasson: “Yes.’’ Mr Afonahan; “The consideration was sixty-two thousand pounds—so that for wbat AfcArthur paid less than twenty thousand —in fact pa : d nothing at all—he received sixty-two thousand! Do you say that the Board of the Southern British Company ever considered that transaction at all--with a profit of approximately forty thousand pounds to Ale Arthur. jusr by turning paper over in that way?” Glasson: “I really cannot say.’’ McARTHUR’S OPTION. Replying to the Commissioner at a later stage. Glasson said: “AfcArthur and Alcorn transferred shares in the Investment Trust to the Southern British National Trust. They were to receive seventy-five thousand pounds odd between them. That consideration was satisfied by the transfer of British Naf-onal Trust debentures; but these were not handed to them. I have received instructions to credit them -with the value of these debentures, and to transfer the debentures into the debenture holders’ account in the Soulth British.”

Continuing, Glass-on said that, under the transfer, AfcArthur and Alcorn would still receive the same return for the shares that they had paid into the company. Instead of the British National Tnist debentures, they- were to receive ordinary deferred shares in the Southern British.

Mr Afonahan: “Supposing AfcArthur in his capacity as a creditor of the Southern British, decides that he will not take these deferred shares in the company, after being requested to do so by McArthur in his capacity as representative of the Southern British, is not the position thdn that, as creditor, his claim on the company ranks before that of the preference shareholders?”

Glasson: “Yes. He probably would. - ’ Afr Afonahan: “These preference shareholders are the public who put in real money?’’ Glasson: “Yes. That is the position at present.” The hearing was adjourned. AUCKLAND, August 22. Evidence concerning the Transport

Mutual and Genera] Insurance Company. Ltd., one of the companies mentioned in the interim reports of the Company Promotion Commission, was tendered at a sitting of the Commission in Auckland by Al. G. McArthur, solicitor. The hearing was held, following a request from two officials of the Auckland District Law Society, who appeared before the Commission, and stated that they knew AL G. McArthur as a man of integrity and a practitioner who enjoyed the confidence and respect of the legal profession. They were perturbed lest the publication of his name in the interim report would be misinterpreted by the general public to his professional detriment. • McArthur indicated to the Commissioners that had he been informed that evidence was being taken in relation bo the affairs of the Transport Mutual and General Insurance Company. Ltd., on June 7th, he would have been perfectly willing to attend and give all the information in his power. The Commissioners accepted this assurance. It was subsequently stated by the < ’ommissi'onors that they were satisfied with AfcArthur’s explanation of his connection with the transaction. They des'red to stale that the inclusion of the names of individuals in the interim report did not necessarily imply any moral criticism.