COMPANY AFFAIRS.

Manawatu Standard, Volume LVII, Issue 8, 8 December 1936, Page 2

COMPANY AFFAIRS.

ALLEGATIONS IN COURT. Per Press Association. CHRISTCHURCH, Dec. 7. Sensational allegations against the operations of the Australian Investment Corporation, Ltd., and another company concerned with the assets of the Investment Executive Trust Company of New Zealand. Ltd., were made in the Supreme Court this morning before Mr Justice Northcroft. when George Ernest Argyle, of Ashburton, printer, petitioned for a return of debentures in the Investment Executive Trust to the value of £l7O, the allegation being that he had transferred them in consideration of debentures to the same nominal value in the Australian Investment Corporation, which company was the defendant in the action. Plaintiff's claim alleged that he had been induced to make a transfer by the misrepresentations of Osmond Arthur Bridgewater and of William Munro, admitted agents of the defendant company. "This," said Mr Young (for plaintiff), "is one of ten cases which will be brought against the defendant company. The! allegations are all based on similar fraud and misrepresentations." "Bridgewater," Mr Young continued, "is a super high-power salesman and must rank in a class by himself in New Zealand. A slammed door and the shout of 'No!' meant nothing to him. By glamorous representations, returning again and again, he achieved his object." The Australian Investment Corporation, counsel continued, was founded in 1935. The "self-appointed" managingdirector was 0. A. Bridgewater; the chief salesman was O. A. Bridgewater; and the managing-director of the broking firm handling the debentures was O. A. Bridgewater. In fact, the whole thing was O. A. Bridgewater. Bridgewater had been connected with J. W. S. McArthur, as would be proved, said Mr Young. He was McArtbur's agent for Canterbury, South Canterbury, Marlborough, Nelson, and the West Coast. Debenture-holders in the Investment Executive Trust knew Bridgewater was "hand in glove" with McArthur, and consequently when he came to them in 1935 they were suspicious and pressed him on the point. Bridgewater told them he had been caught in McArtbur's company and had transferred all his shares to the new concern. "Actually, he had half, forty debenturcs," Mr Young said, " and to show his confidence in the new concern he had not transferred a single debenture."

The defendant company, counsel continued, had collected debentures in the Investment Executive Trust to the face value of £85,000. It was known then that only 12s 6d in the £ would be paid to the unfortunate investors. In April the Public Trustee paid a dividend of 2s in the £.

BALANCE-SHEET FIGURES. Counsel continued that the annual meeting of the Australian Investment Corporation had been held some months ago. The balance-sheet revealed that Bridgewater or his promoting company, 0. A. Bridgewater and Co., Ltd., had received £IOOO for establishment costs and over £4OOO in commission, this being later deducted from the money which had come from the public by way of dividend from the liquidated companies. By securing the transfer of debentures in the Investment Executive Trust, the corporation had received about £27,000 in the distribution by the Public Trustee. The balance-sheet also showed that £3250 had been invested in the Investment Development Corporation of New Zealand, Ltd., a company which had been formed at Wellington on June 5, 1930. Shares in this company were also held by the McArthur Trust, formed by J. \V. S. McArthur in Queensland, where no legislation similar to that of New Zealand and New South Wales had yet been enacted. The first proof of a definite connection between Bridgewater and McArthur, counsel continued, was obtained on July 15, 1936, when their names were ente'red with the Registrar of Companies, Wellington, as directors of the Investment Development Corporation. . , . . , The representations complained oi had been made to plaintiff by Bridgewater in August, 1935. Plaintiff believed that Bridgewater was a loser through the McArthur transactions. The transfer was effected, and it was not until the following April, when he found that another debenture-holder who had not transferred his holding had received a dividend from the Public Trustee, that his suspicions were first aroused. Plaintiff's claim was for the cancellation of the contract between plaintiff and defendant company for the transfer of the debentures and for the return of the debentures. Evidence on the lines indicated by counsel was given by plaintiff, who said that after he had consulted his solicitor with a view to recoverng the shares he was interviewed by Bridgewater: Bridgewater had represented to him that the solicitor, Mr Young, had lost interest in the case, and that several other persons who had consulted Mr Young had since withdrawn the matter from his hands. The case is part heard.