THE TRUST TANGLE

Grey River Argus, 8 September 1934, Page 5

THE TRUST TANGLE

JUDGE’S CALL For Traces of the Funds & N.Z. Cable Assn.) (Received September 7 at 7.10 p'.m.) SYDNEY, September 7. Further questioned before the Com mission. Hewitt said I hmt the British National Tiust Coy. was lanying debentures up to four hundred th usand pounds. There were four or five ad ditional debentures signed and ready for issue Before a ll officer of the Roval Commission had taken possession of them, they had been 'in 'he posses ior, of AfcArthur. Air Alonahan. K.C.: “Did you under, stand that the process of issuing debentures was to continue up' to one million pounds?” The ('omnii. si.oner remarked: “The whole control of the opera'ions was in AlcArthur’s hands. If he wanted twent"- thousand -'ounds worth '< f’ debentures ’issued, would they be issued ? ’ ’

Howitt: “I wou'd have to rsue deben'ures to cover the transac’tions. ” The Commissioner: “You had no power to investigate the reasons? ’’ Hewitt: “No. I issued the deben-

After Hewitt had given evidence relating to various 'ransfers of shares and debentures, the C■ mmissioner said lie thought that a statement should be prepared as to the why and he wherefore of these transaction s. He would like to have a kind of chart, showing how the moneys passed' from one p’acc to another, ami what was the net result.

Mr Alonahan: “Yes—something which would dis'eloso wha*t amounts of public money have been turned into debentures, and what become of the money. ’ ’ The Commissioner; “Exactly!” Dr. Louat (for some of tho companies): “That would demand ingenuity.” The Commissioner: “Of course it

would! Because of all these ingenious transactions, the position is tangled. I want it untangled and 1 expect to get it un t ang’ed That is one of tho purpo es of the Commission. If anyone thinks that he can 'cloak it any further. I hope he will be disappointed.” Air Bryan Fuller ''counsel for the Investment Executive Trust and for the Southern British National Trust): “T’t can be untangled. It is very easy. ’ ’

Questioned by Air Afonahan, K.C., Hewitt said that up till June, 1934, £72,856 had been spent on alterations and improvements to the Trust building. The Sterling Investment Company had paid £91.000 that was owing to the British National Trust by giving the latter £50,000 worth of shares ■and promising to issue debentures for the balance. An undertaking has also been given that Sterling would not contract a debt of more than £lOO without the consent of the British National Trust. MCARTHUR’S DRAWINGS. (Received September 8 at 10 p.m.) SYDNEY, September 7. Speaking further at the Commission, Judge Haise Rodgers, the Commissioner, remarked that he did not know where Hewitt’s responsibility began or ended. Hewitt: “I am in the same boat.” The Commissioner; “That is as I thought! I should think that Hewitt and Glasson, in conference with McArthur, could, however, prepare some of the statement that I want. It will also be necessary for me to have a statement of the drawings of AfcArthur for the last two years, together with his private bank accounts, and a statement of the property he has received in kind. Alcorn was recalled, and was examined by Afr Fuller, who, addressing the witness, said that the latter had been asked questions by Afr Monahan relating to a transaction in connection with motor cars. u You were doubtful about what security was held?” added Afr Fuller. “Do you know what security was taken in regard to that transaction?” Alcorn said that he had communicated with New Zealand and had ascertained that the trust deed had been executed prior to the advancement of the money. »

The Commission adjourned until Tuesday to enable counsel to confer with their expert advisers in the examination of balance sheets which already had been produced to the Commission. B.M.A. SECRETARY. AND AIED.ICAL INVESTAfENT TRUST. SYDNEY, September 7. At the Royal Commission on Company Promotion, Dr. J. G. Hunter, Secretary of the New South Wales branch of the British Medical Association, gave evidence. lie gave an emphatic denial that he had ever approved of the aims of the British Medical Investment Trust. He said he had refused an offer by Afajor Jarvie, ALL.A., that he should accept a position as director of the Company. Foster had later seen witness. “It is absolutely incorrect that the words ‘British Afedical ’ were ever mentioned nor did I ever tell him 1 had no objection to the use of the words,” said Hunter. COMPANY LAW’S DEFECTS. SYDNEY, September 7. A suggestion that the assistance of experts be invoked for the purpose of advising the Commission regarding amendments that could be made to the company law was made when the Commission resumed. The Commissioner: It seems the Commission has reached a stage where examination of witnesses will soon be concluded. This is a matter affecting the whole community, particularly the commercial community. Expert advice is needed, and I want to know who the Crown propose calling. Afr Afonahan said he thought it would be necessary to call members of the Stock Exchange, Chartered Accountants’ Association, Bar Council and Law Institute, together with any member of tho public who was sufficiently qualified to make suggestions. VICTORIAN INQUIRY. AfELBOURNE, September 7. The Companies’ Special Investigation Act received Royal assent. The State Executive Council ap-

proved the order appointing two chartered accountants, J. W. Ross and L. A. Cleveland, as inspectors under the Act to investigate the affairs of the companies specified. The inquiry will commence immediately into Southern British National Trust Ltd., V. B. Mclnnes and Co. (Australia) Ltd., and Commonwealth Homes and Investment Co. Ltd. It was announced that the AttorneyGeneral was satisfied a prima facie case had been established, and it was necessary for the protection of the public and the creditors of companies named that the affairs of these companies should be investigated. A PAYMENT EXPLAINED. AUCKLAND, September 7. Tn evidence given by Stanley Grange, sharebroker, before the Royal Commission in Sydney yesterday, it was stated that £750 had been paid by one of McArthur’s companies to V. R. Meredith, Crown Solicitor, at Auckland. Mr Meredith’s law partner said today the sum was received by his firm as trust money for the Railways. Land and Income Tax Departments, and had been duly accounted for to those Departments. TRUST’S CONTENTION DENIED. WELLINGTON, September 6. Tn the House to-day, Air J. N. Massey asked the Minister of Finance whether he had seen a circular letter from the Chairman of the Executive Trust of New Zealand, which suggested the action taken by the Government was to preclude the payment of interest to debenture-holders in New Zealand, and whether he was in a position to make an announcement on the subject. Mr Coates, replying, said that no pressure was brought to bear on him in connection with the investigation of the affairs of the Trust. Tn introducing the legislation, he and the Government were influenced solely by considerations of public interest in the light of what was disclosed in the first report of the Commission. He had never refused and had no power to refuse, to allow the company to pay interest.