McARTHUR’S PLAN

Grey River Argus, 3 October 1934, Page 5

McARTHUR’S PLAN

FOR RECONSTRUCTION Of Trust Companies (Aus. & N Z. Cable Assn.) SYDNEY, October 2. At the Companies Commission to[day, when explaining the dispute between the Southern British and one of Ale Innes’ companies, whereby reference had been made, Air AlcGhie, who appeared for Mclnnes, said that the AlcTnnes Company had sold Southern British stock, which later had subsequently been cancelled. The Afclnnes Company, however, claimed that it was still entitled to commission. (Received October 2 at 7.20 p.m.) SYDNEY, October 2. At the Companies Commission, the counsel engaged in the inquiry devoted more than an hour to a general discussion upon intricate items in the balance sheets and financial statements of the AlcTnnes group of companies. Air. W. W. Alonahan, K.C., intimated that he had received a letter from AT. Hampson, barrister and solicitor, of New Zealand, who felt that his reputation might be affected by something said before the Commission, and offering to come to Sydney to give evidence.

The Commissioner, Judge Haise Rodgers, said that he would read Hampson’s affidavit, and see whether his reputation was affected, as he did not remember anything said affecting him. However, any persons who thought their re-putations were at stake could appear before the Commission to clear away any misapprehension concerning themselves. J. W. S. AlcArthur submitted his scheme for the reconstruction of the companies, and his proposals were as follows:— (1) The elimination of certain companies. (2) The reorganisation of the control of the Investment Executive Trust of New Zealand, Limited, and of the Southern British National Trust, Limited.

(3) A new scheme of control for the British National Trust, Limited. AlcArthur suggests the elimination of the following companies:—(l) The Sterling Investment Company of New Zealand, Limited, assets of which would be transferred to the British National Trust, Limited, and the former company be struck off the register. (2) That the Pacific Exploration Company, Limited, be struck off the register, and the assets transferred to the British National Trust, Limited. (3) That with regard to Farms and Farmlets, Limited, the shares therein be transferred to the Southern British National Trust, Limited, and held in I trust for the debenture holders, pending the completion of the proposed amalgamation of the B Debenture Issues of the Investment Executive Trust and the Southern British National Trust; after which such shares would be transferred to such amalgamated debenture issue free of cost to the debenture holders; also that the other assets he sold, and the company cease operations; (4) that in regard to the British National Investment Trust, Limited, the Trust Building to be conveyed to the British National Trust, and the company be struck off. the register. AlcArthur added that the steps proposed to be taken in regard to the I British National Investment Trust preference shares can be dealt with more appropriately among the proposals relating to the British National Trust. AlcArthur also proposed that Wynwood Investments, Limited, and the Investment Securities Association, Limited, be struck off the register, as these are not at present connected with the Trust Companies. In regard to the New Zealand Shareholders Trust, Limited, AlcArthur suggested the immediate conversion of the First A and First B Debentures into Second B Debentures. Upon completion of this, the assets of the First A and First B Debentures to be transferred to the Second B; and the First A and First B Debentures to be cancelled. The company would then be struck off the register. In regard to Financial Publications, Limited, AlcArthur proposed that the assets be sold, and the debt owing to the Sterling Investments Company, Limited, be paid to the British National Trust. With certain exceptions, he said, the remainder of the companies mentioned before the Commis sion were not in any way linked with the Investment Trust Companies. McArthur pointed out that the elimination of the Transport Afutual and General Insurance Company was not proposed, as the right owned by this Company to carry on insurance business was not transferable, and was of great value. The remainder of the companies on the Commission’s list, he explained, are either already out of existence, or are entirely separate from the main group. McArthur then propounded a scheme for the reorganisation of control of the Investment Executive Trust of New Zealand, Ltd., and the Southern British National Trust, Limited. He also outlined a scheme, for the control of the British National Trust, Limited. He further explained how the general financial position in regard to trust building might be strengthened. Air Alonahan asked AlcArthur: "Under this scheme of reconstruction, what would be done with the sixtythree thousand • pounds standing for the sixty-three debentures as formation expenses? What do you and Alcorn propose?” AlcArthur; I see no reason why that amount should not be abandoned. I suggest that. TRUST, BUILDING PROFIT. QUESTION OF NEW CONTROL. (Received October 2 at 9.15 p.m.) t SYDNEY, October 2. At the* Companies Commission, replying to Mr Monahan, McArthur said

that in connection with the purchase of the Trust Building, in which he and Alcorn had made a nominal profit of £287,000, they proposed to hand over £178,000. Replying to a question by the Commissioner on the. subject of share hawking, AlcArthur said he thought that companies should be allowed to approach people in offices. He did not think that companies would be materially affected by not being allowed to approach people in their houses. PRESENTS GIVEN. Replying to Air Alonahan, AlcArthur said that, those to whom he had given presents of one thousand pound debentures were Pilkington, Grange, Melnnes, and his (AlcArthur’s) son. Glasson had got £125 worth of shares and Pollard and Pilkington £5OO worth of shares in the Southern British Coy: but Pollard had handed his shares back to witness. He thought that Glover(’lark had got £125 worth of shares. He expected all of these persons who had obtained these benefits would retain them under his proposal for reorganisation. Air Alonahan suggested that the de-benture-holders might ask by what right they should be retained. Dr. Louat (for the companies) said that it was a common practice for Directors to got shares. Air Alonahan: “I am talking about the presents of debentures.” Alcorn, recalled, said that under the proposed reconstruction scheme, he expected to get twenty thousand pounds, of which he had already received four thousand. McARTHUR’S SAY IN FUTURE. The Commissioner remarked that, notwithstanding the proposals for the representation of the debenture holders on the boards of the companies, it seemed that substantial control would still be in AlcArthur’s hands. Air Fuller said that there was an important modification as to investments and as to the appointment of auditors—which points covered most of the powers —and the Directors appointed by the debenture holders would be virtually in control of the companies.

Will Winding-up be Recommended ?

JUDGE’S VIEW. DEBENTURE HOLDERS MIGHT PREFER IT. (Received October 2 at 10 p.m.) SYDNEY, October 2. At the Companies Commission, Judge Haise Rogers, the Commissioner, said that if he reported in the terms which he had in mind about the present management—and mismanagement —of those companies, tho diversion of the assets, and the various other matters which had been mentioned in evidence, the debentureholders might be very loath to entrust the control of their affairs to the people who had had it in the past. Air Fuller said that AlcArthur and Alcorn were extremely desirous of getting an expression of opinion by the debenture holders. A serious position would be created for the deben-ture-holders if the companies were wound up.

The Commissioner said that was not by any means beyond doubt. Tf the value of the Trust Building was anything like that put forward by the principal parties, it. might be possible to allow the companies gradually to realise their holdings, and to carry on until an opportunity presented itself for the sale of the biulding. If the value was there, they would carry on until an opportunity presented itself for the sale of the building. If the value was there, they would carry on indefinitely from revenue. He added: "I am inclined to take the view that the first question should he the preservation of the assets of the deben-ture-holders, but there might be every security by winding up under certain conditions. ’ ’

The Commission adjourned till to morrow.