Australian Finance Co.'s Suspension

Manawatu Times, Volume 64, Issue 175, 27 July 1939, Page 6

Australian Finance Co.'s Suspension

Large Sum Invested From New Zealand

DETECTIVES INVESTIGATING Per Press Association. AUCKLAND, July 26. Detectives in various parts of New Zealand have just completed an investigation on behalf of the Australian police into the affairs of the Scottish Loan and Finance Company, Limited, of Sydney, which recently went into liquidation. New Zealanders bought nearly £40,000 worth of preference und ordinary shares. Only a few months before it appeared that the company had suspended its business as a money-lending institution an Auckland business man paid £IO,OOO cash for preference shares and a Dunedin man £SOOO for ordinary shares in the company. The majority of shares sold since the prospectus was brought to the Dominion toward the end of November of last year were sold in the Auckland Province. Romo went to Waikato, others to Taranaki, Christchurch and Dunedin. It has been estimated that about £30,000 worth of preference shares were sold iu this country betweeu the end of November, 1938, aud May 11 last when the company closed its doors in Sydney. Of that total about £25,000 came to this province, Waikato and Taranaki. It is estimated also that about £BOOO worth of ordinary shares were sold in the Dominion in the 12 months before the date on which the company went into liquidation. Inquiries made to-day in various quarters in Auckland elicited the fact that the actual deficiency of the Scottish Loan and Finance Company, Limited, is not yet known, but is believed to be considerable. All told there a.o about 70 shareholders in New Zealand and they have formed themselves into an association to protect their rights. An Auckland sharebroker has instructed a solicitor to act for the shareholders. The company has a registered nominal capital of £900,000 divided into 750,000 ordinary shares of £1 each and 150,000 8 per cent, cumulative preference shares of £l. In a report by an Auckland firm of solicitors to the shareholders iu tliia country is the statement that when the draft prospectus was issued here iu , November the preference shares especially seemed to be an inviting investI ment. Investors were amazed wheu it j was stated in Sydney newspapers that jthe company had suspended business. | According to press reports the directors [discovered great irregularities and applied to the Chief Judge in Equity for the appointment of a provisional liquidator. It was alleged in Court that the directors also called in tho Criminal Investigation branch and that the manager of the company had been j suspended. Suspicion had been aroused when it was learned that £3OO remitted by au Auckland sharebroker had not bee.i banked with the company's funds. Tho Australian police then asked the Commissioner of Police in New Zealand (Mr. D. J. Cummings) to bnve inquiries made here.