COMPANY METHODS

Hawke's Bay Tribune, Volume XXIV, Issue 232, 13 September 1934, Page 8

COMPANY METHODS

THE SYDNEY INQUIRY Definition of the Objects MR. McARTHUR’S PURPOSES By Telegraph—Press Assn. —Copyright SYDNEY, September 12. At the company inquiry ‘to-day the Commissioner. Mr Justice Haise Rogers, defined the objects of the Inquiry and said it seemed that, while every effort should be made to conserve the assets of the two main companies, the activities of the others might best be discontinued. They had been tinning themselves into all sorts of companies in order to conceal themselves. The sitting was short, as lack of balance-sheets prevented complete examination. Mr Justice Haise Rogers presided as Commissioner, Air W. W. Monahan, K.C., and Mr J. B. Collier appeared us counsel assisting the commissivfti, Mr R. Windeyer, K.C., and Mr B. Fuller for the Investment Executive Trust of New Zealand, Limited, and the Southern British National Trust, Limited, and Dr. F. Louat for three other companies. MIL McARTHL’R’S DIRECTIONS. After Mr Hewitt had been questioned regarding tho balance-sheets the Commissioner remarked: “I am instructed to investigate the companies’ activities and J want to know whether tho finances were in a chaotic condition right up to the appointment of the commission. The inference one may draw at present—arid Mr McArthur does not throw any light upon it —is that, whatever may be the state of the investment register, all of the ijr- lived transactions of the various companies are simply done at Air MeArthur’s direction and for his owu

purpose.” Air Hewitt: 1 do not t'diik so.

Air Alcorn, recalled, was examined regarding the transaction between the Investment Executive Trust, the Transport Mutir d General Insurance Co (its subsiu .•) and the Trustees, Executors and Agency Co. Witness said that the object was for the Transport Alutual to act for the Investment Executive Trust and to gain a substantial interest in the Trustees and Executors Agency Co. The Commissioner: You can leave out the Transport Alutual. It is only a dummy. Replying to further questions, Afr Alcorn said that Air McArthur was to control tho whole thing, but that his name was not to appear as coming into the business. There was no secret, however, that the Investment Executive Trust owned all the shares in the Transport Alutual. Continuing, Mr Alcorn said that travellers were supplied with cash nnd sent to New Zealand with instructions to buy Trustees and Executors Agency shares as cheaply as possible, but to buy thorn. Shares on the New Zealand Stock Exchange were at £3 5/- and those obtained by the Investment Executive Trust cost on an average £3 12/6. Replying to Mr Alouahun, witness said that they had acquired about 45 per cent of the shares, which he thought gave them control of the company. He agreed with Mr McArthur that the present directors, who, he suid, were more than 80 years of age, were not enterprising enough and should be replaced. Air Monahan then intimated that he could carry the matter no further until the balance sheets had been completed. REASONS FOR INQUIRY. Alter further discussion the Commissioner said that tho commission was primarily concerned with ascertaining whether the public was properly secured for the money it had subscribed. The second point was whether the companies had been improperly used lor the purpose of personal gain by any persons connected with them and if it appeared that those companies were being properly used. The third object "as to trace where the money had gone, and in doing so it great number ol difficulties had arisen.

“Ln regard to the two main companies, ’ the Commissioner remarked

“everything must be done to preserve their assets. As to some oi the others, it might be a good thing if they were not continued They have been turning themselves into all sorts of different companies and putting so many cloaks over themselves, so to speak. It is one of the abuses of the present company law, I think, that a single individual can call himself A company or B company or C company and so avoid risking a great part of Ins assets in any speculation or trade. If anybody cun suggest how legitimate companies can carry on without being hampered and. at the same time, how these companies which ar ( , so liable to lend themselves to abuse can he prevented from operating I think flic commission may do a very great air I of good.’’ MR. MONAHAN’S INTENTIONS. The Commissioner added that if Mr .Monahan intended io make any charges iu regard to the management oi' any

of the companies or in regard to the conduct of individuals in the course of his address at the conclusion of the commission's sittings it would be tai’ for him to formulate them beforehand so that counsel interested could address themselves to such charges. Mr Monahan said that he had fairly and plainly indicated th«in in his examination. but he would do as tho Commissioner had suggested. He proposed to proceed with Mr McArthur's examination on Monday. The commission adjourned until Monday. PAYMENT OF N.Z. INTEREST Question Raised in House He J'elegiup'i Press Association, WELLINGTON, Sept. 12. The Rev. Clyde Carr (Timaru, labour) asked the Minister of Finance in the House of Representatives this afternoon whether he was taking any steps to conserve the interests of debenture and bondholders in the various companies dealt with by the interim report of the Companies Commission. Members, he said, were being besieged by constituents whose interest payments were being withheld. The lit. Hon. J. U. Coates in reply said: “The Act places no restriction nor imposes any penalty on remittances of money within New Zealand, and if the company has fun Is in New Zealand properly available for the purpose, there is no reason that I am aware of why inteiest to New Zealand debenture holders should not be paid if it is due.” Mr Can asked if the Minister would do anything to help people get their interest, ii Mr Coates did not reply.