McARTHUR GROUP

Hawke's Bay Tribune, Volume XXVI, Issue 236, 18 September 1936, Page 6

M c ARTHUR GROUP

Evidence of Formation and Activities

DIRECTOR’S TESTIMONY

By Telegraph—Press Association AUCKLAND, September 17.

Further information about the formation and activities of a number of companies belonging to what is known as the “McArthur Group” was given during the hearing of the Bedwood Forests case in the Supreme Court. ■ Mr K. C. Ackens, solicitor, said he had been chairman of directors of Sterling Investments from its incorporation and still was a director. His co-directors had been Messrs C. G. Alcorn and Glover Clark, but Mr Clark had resigned after about two years. No cash was subscribed by the shareholders at any time and, as far as he knew, the cash to start the company came from the Investment Executive Trust. Messrs McArthur and Alcorn really ran the company and dictated all its policy and carried it out. Ho never did anything on his own initiative but on the instructions of Mr McArthur or Mr Alcorn.

Witness said he knew that Sterling Company was buying Investment Executive Trust debentures and these were being bought by V. B. Mclnnes and Co. and being taken over by the Sterling Company. He understood that the object of buyipg those debentures was to keep up their price.

He remembered some transactions dealing with Mr McArthur’s Hillsborough property and he thought that the Sterling Company took it over and also some Newmarket property that belonged to McArthur,

Witness identified signatures on a cheque of February 28, 1934, of Sterling Investments to J. \V. S. McArthur for £60,000 and also a cheque of the same date for £60,025 drawn by Wynwood Investments in favour of Stealing Investments.

Mr Johnston: I would like to see a cheque of this size. Mr Barraclough; My friend has not been long enough in this case or he would have seen dozens of them. That’s a mere bagatelle.

Norman Alexander Duthie, public accountant, said he was one of the inspectors appointed by the Government to investigate the affairs of various companies. Witness described the origin of Kotahi Lands and said that Edgecumbe Forests acquired all the shares in the Kotahi company. Witness said that in May, 1931, 2.1,224 acres was sold to Timberlands Woodpulp Ltd. for £33,350. Timberlands gave a mortgage back for £28,350, leaving £5OOO, which was apparently paid in cash. The Edgecumbe company was wound up in March, 1933, and the books handed to the Sterling company for safe custody. When £5OOO was paid back off the Timberlands mortgage it was in part distributed in loans free of interest to shareholders and loans of £3OO and of £740 were made to Mr McArthur.

Witness traced further repayments of £5OOO off the Timberlands mortgagge and said that £l5OO and £lO5O were advanced to Mr T. It. McArthur, who, he believed, was a son of J. W. S. McArthur. Sums of £4600, £7750 and £9OO were lent to Sterling Investments. “The Sterling company,” said witness, “on March 6, 1933, paid the Edgecumbe company £19,300 in purchase of its assets. This was two days later lent back to the Sterling company on deposit at call at 31 per cent. This £19,300 unsecured loan was an asset of the company and passed as such into the liquidator’s hands. The hearing was adjourned.