INTERLOCKING CONCERNS

New Zealand Herald, Volume LXXI, Issue 21874, 9 August 1934, Page 13

INTERLOCKING CONCERNS

FIFTEEN COMPANIES COMMON SHAREHOLDERS CONCENTRATION OF CONTROL [BY TELEGRAPH SPECIAL REPORTER] WELLINGTON. Wednesday The report then proceeds to deal with the organisation of 15 companies which comprise the Investment Executive Trust of New Zealand. Limited, and its affiliates. "We desire to point out that the respective lists of shareholders are not complete lists," says the report. "We have chosen names that are common to most of the companies for the purpose of showing the interineshing ownership and control. Concentration of control is effected through the holding of shares by one company in another. "(1) The Investment Executive Trust of New Zealand. Limited. This is a public company incorporated in New Zealand in May, 1929. It is an investment trust followine fairly closely the lines of what is known as a contractual trust company. Its present authorised capital is £IOO,OOO in 250.000 ordinary shares of 2s each, and 75,000 preference shares of £1 each. A prospectus dated April, 1934, states that the paid-up capital is £29,970. Three Directors "According to the same document, its directors are J. W. S. McArthur, W. A. Pilkington and H. H. Pollard. In addition to the directors, its shareholders include C. G. Alcorn, Stanley Grange, Katherine I. Grange, Richard Glover-Clark, V. B. Mclnnes; Alcorn, Trower and Company, Limited; the Investment Securities Association, Limited; Sterlinc Investments Company (N.Z.), Limited. The prospectus referred to above offers 'first mortgago perpetual income debentures' to a total of £4,000,000. "(2) The Sterling Investments Company (N.Z.), Limited. This is a public company incorporated in October, 1930. It is an investment company of a kind which is hard to classify. Its memorandum of association gives it power to carry out all kinds of financial operations. Its, nominal capital is £50,000 in shares of £1 each. Its paid-up capital as at March 28, 1934, is shown as £2350 14s. Its directors are shown as Charles Graham Alcorn and Kenneth C. Aekins. Its largest shareholder is the Investment Securities Association, Limited, which holds 20,801 shares, while the other shareholders hold in the accregate 200 shares. Its latest return, filed at the registrar's office on March 28, 1934, shows the amount of debt due under mortgages as nil, but it has had at times mortgages and charges registered up to a maximum of £165,000. A Private Company

"(3) The Investment Securities Association, Limited. This is a private company, incorporated in December, 1930. The capital is £IOOO. divided into 750 shares of £1 each, and 5000 shares of Is each. According to its latest return, its shareholders are C. G. Alcorn, Elizabeth Roberta Alcorn and Katherine Isobel Grange. "(4) The British National Investment Trust, Limited (New Zealand). This was incorporated in November, 1931, under the name cf 'The Stock Exchance Corporation of New Zealand, Limited,' but it subsequently changed its name to the above. This company is formed to act as broker or trustee for any person or company, and as promoter or founder of companies, also to take full control of or take part in the management of companies ov undertakings. "The latest return, filed in December, 1933, shows that Stanley Grange is the sole, director. Its capital is £IOO,OOO in 250,000 ordinary shares of 2s each and 150,000 preference shares of 10s each. Of this, there is paid up £3187. Its shareholders include C. G. Alcorn; S. Grange; J. W. S. McArthur; V. 13. Mclnnes; It. GloverClark; T. 11. McArthur; the Investment Securities Association, Limited; the British National Trust, Limited (Canberra); the Southern British National Trust, Limited, of Sydney, New South Wales. The maximuni amount of charges registered by this company at any time was £IOO,OOO. Association of Investois "(5) The New Zealand Shareholders Trust, Limited. This company was incorporated in December, 1931. Its objects include those which are common to investment trust companies, but its primary purpose was nominally to act as an association of investors throughout New Zealand to provide information and protect their interests. Its capital is £60,000, divided into 100,000 ordinary shares of 2s each and 50,000 cumulative preference shares of £] each. Its paid-up capital at April 9, 1934, is returned as £lO7l. At the same date it registered its total indebtedness in respect of debentures and charges at £264,000. The maximum amount of charges registered at any time is £500,000.

"Its directors are. C. J. Lovegrove. It. S. Abel and It. Glover-Clark. The largest shareholder is the Sterling Investments Company (N.Z.). Limited, which holds 8779 out of 10,476 ordinary shares. Other shareholders are S. R. Grange and R. Glover-Clark. Paid-up Capital Not Known

"(6) Wymvood Investments, Limited. This company was incorporated as a private company in August, 1930. Its capital, originally £IOOO, was increased to £IO,OOO in October, 1933. As it is a private company, its paidup capital cannot be ascertained. Its shareholders in April, 1932, were C. G. Alcorn, one; J. W. S. McArthur, one; the Sterling Investments Company (N.Z.), Limited, 988; the Investment Securities Association, Limited, 10.

"The latest return is dated March, 1934, and gives the shareholders as Stanley Grange, 100; J. W. S. McArthur, 9900. In December, 1933, this J company registered as a charge a debenture issue of £IOO,OOO. "(7) The Pacific Exploration Company, Limited. This is a private company incorporated in May, 1932. Its original subscribers were the Sterlinc Investments Company (N.Z.), Limited, 9999 shares; and M. Grigory, one share. The latest list gives the Sterlinc Investments Company (N.Z.) Limited. 9979; M. Gregory, one; C. G. Alcorn, 10; T. R. McArthur, 10. There is evidence that the object of this company was to procure and finance the building of a somewhat luxurious sea-going yacht. Farms and Farmlets, Ltd. "(8) Farms and Farmlets, Limited. This was incorporated in August, 1928, as a private company. The subscribers are W. C. Hewitt, solicitor, 500 shares, and his wife, Flo Hewitt, 500 shares. The authorised capital was £IOOO ii) shares of £1 each. Its objects are in the main those which one would expect to find prepared for a small farming company, but it also has powers to deal in money, investments, securities and property. Its capital was increased in June, 1933. to £25,000 in shares of £1 each.

"In May, 1934, the registrar of companies wrote to the office of the company at our request, asking if any of the shares in the increased capital had been subscribed, and he received a reply that the information could not be given because the managing-director was in Sydney. This company firstly gave an ordinary chattel security to the National Bank of New Zealand over its farming assets. In June, 1933, it registered as a charge £IOO,OOO in 500 bearer debentures of £2OO each. This company now appears as a principal shareholder in British National Trust, Limited, incorporated in Canberra. Australia. It holds 51,200 shares of £1 each in that company. Business ol Financiers (9) The First Mortgage Freehold Security Company of New Zealand, Limited. This is a private company registered in November, 1924. Its objects are the carrying on of the business of financiers, financial brokers, issue of debentures and receiving of money for investment. Its original capital was £IOOO in shares of £1 each, but it was increased in March, 1930, to £IO,OOO in 6000 shares of £1 each and 80,000 shares of Is each. "The principal shareholder is C. G. Alcorn, who holds £9SOO shares. The remaining 500 shares are held by tho Investment Securities Association, Limited; Eliz R. Alcorn; Alcorn, Trower and Company, Limited, and R. S. Abel. In March, 1925, this company filed notice of a charge by way of mortgage debentures to an amount of £IOO,OOO. "(10) The Transport Mutual and General Insurance Company, Limited. This company was incorporated in November, 1933, as a public company. The authorised capital is £IOO,OOO in 100,000 shares of £1 each. " Dummy " Subscribers "The subscribers to the memorandum were seven nominees, or 'dummies,' who subscribed for one sharo each. In February, 1934, 60,000 shares of £1 each were allotted to the Investment Executive Trust of New Zealand, Limited, and the statutory report, filed on February 21, 1934, shows that the Investment Executive Trust had paid-up 10s per share on these shares, or £30,000 in all, and had also paid up cash in advance of calls £ISOO. Further reference will be made later in this report to the use of 'dummy' subscribers and 'dummy' directors in this company. "(11) The Southern British National Trust, Limited. This company was registered in Sydney, New South Wales, in January, 1933. It has a nominal capital of £500,000 and paid-up capital of £97,500. It has issued a prospectus in New South Wales offering for subscription debentures to an amount of £5,000,000. The principal shareholders in the latest annual list filed are W. A. Pilkington, H. H. Pollard, H. C. Glasson, Madge Gregory, Richard Glover-Clark and J. W. S. McArthur, the latter holding 17„000 shares. Dealing In Securities "The objects may be stated briefly as being to acquire and deal in all forms of securities and investments. The company may be adequately described for our present purposes as being the equivalent in Sydney of the Investment Executive Trust (New Zealand) in Auckland. Its directors are W. A. Pilkington, H. H. Pollard and J. W. S. McArthur. The close correspondence between the directors and the shareholders in the two companies should be noted. "(12) The British National Trust, Limited. This company was incorporated in January, 1933, at Canberra, Australia. The nominal capital is £1,000,000 in shares of £1 each.' Of these, 65,007 have been subscribed and £1 per share called up, and the return at the registrar's office in May, 1933, shows these shares as fully paid-up.

"The seven subscribers to the memorandum of association of this company are again 'dummies,' being clerks and secretaries in the offices of the above companies or their brokers and solicitors. These signatories are all resident in Auckland, and are therefore out of the jurisdiction of the territory and State in which the company is registered. The principal shareholders in the company arc Thomas R. McArthur, C. G. Alcorn, .T. W. S. McArthur and Farms and Farmlcts, Limited. Functions as Manager

"(13) V. 13. Mclnnes and Company, Limited. This company was incorporated in New Zeal anil as a private company in May, 1932. Its capital is £IOOO in shares of £1 each, the subscribers being V. B. Mclnnes, 900 shares; and Investment Securities Association, Limited, 100 shares. Its objects are to act as broker, trustee and agent, also to exercise many of the objects of investment trusts and to act as rlirector or manager and to take full control or part control of another company or business. "(14) Alcorn Trower and Company, Limited. This company was incorporated in Wellington as n private company on June 24, 1914. The solicitor registering the company was William C. Hewitt. Its capital is £3OOO in shares of £1 each. The subscribers were C. G. Alcorn and A. S. Trower, with 1.500 shares each. On January 11, 1923, the shareholders were returned as C. G. Alcorn, 1500, and Eli/, R. Alcorn, 1500. On June 30, 1931, the company registered as a charge three bearer debentures of £2OO each. It is a shareholder in the Investment Executive Trust of New Zealand, Limited, and First Mortgage Freehold Security Company of New Zealand, Limited. "(15) Financial Publications, Limited. This company was incorporated at Auckland as a public company in May, 1933. Its capital is £SOOO in shares of £1 each. The promoters and present directors are C. J. Lovegrove, R. V S. Abel and R. Glover-Clark. This company owns and publishes the Investment Review, a monthly financial magazine published in Auckland."