COMPANY INQUIRY

New Zealand Herald, Volume LXXI, Issue 21875, 10 August 1934, Page 12

COMPANY INQUIRY

' SITTING IN SYDNEY OFFICIALS < EXAMINED MR. McARTHUR QUESTIONED METHODS OF BUSINESS PAYMENTS FOR SERVICES i (Received August 9. 9.5 p.m.) SYDNEY. August- 9 At the opening sitting to-day of the Royal Commission for the investigation of the affairs, of 17 companies, mentioned in the schedule of the special Act passed yesterday by the New South Walds Parliament, the first witness called was William C. Hewitt, a New Zealand solicitor, who now resides in Sydney. He said he was a director of the British National Trust. Limited, registered/at Canberra. Witness said he was also acent in Sydney for the British National Investment Trust. These companies carried on business in the former Daily Telegraph building. Sydney. His daughter assisted him. ' • Hewitt said he was the sole director of. the British National Trust, the capital of which was £1,000.000. Farms and Farmlets. Limited, which was registered > in New Zealand, held shares in it. He believed the original shares were taken up by Messrs. J. W. S. McArthur, C. T. Alcorn and T. R. McArthur. •r; Witness Owns to Eemissness Cheques were passed for pavment for ' shares. No books were kept for thd British National Trust beyond a minute book. This was entirely due to witness* own remissness. However, the records necessary to complete the books were in hia room, Hewitt hoped. "Witness said he was also attorney in* Sydney for the Southern British National Trust. This company had been housed in the Trust Buildinc, Sydney. More than two months, but had not yet paid any rent, as the lease was not (Completed.

While he had been acting as attornev he had received many thousands of pounds from applicants for debentures. Also he had rec€iived some shares and other securities. - : Shares Not Paid For in Cash Harold Charles Glasson, secretary of the Investment Executive Trust of New Zealand, The Southern British National Trust and Wynwood Investments, said the share capital of the first-named company, which was registered in Auckland, amounted to £IOO,OOO, most of which was called up. Cheques had passed for shares and the cheques went hack to the persons paving" into the company.

-Mr. W. Monahan, K.C.. who is assisting the commissioner, asked witness how many shares; were issued and paid far otherwise than in cash. said it would run into thousands. He added that the capital inrested iy this company had been reinrested in about 200 different companies.

" Business by Exchange of Cheques

"Replying to Mr. Monahan's further qhestions, Glasson said the Southern British- National Trust, registered in Sydney, carried on the same business as the Investment Executive Trust of New Zealand. It had the same directorate, the same secretary. Not many shares in this company were paid for in' actual cash. There was merely an exchange of cheques. The Commissioner: What was the Ibasis of this exchange of cheques?

Witness; These people were selling Ihfeir services to the company—it was folr services rendered. Ik there any record of these services P •-rOnly. in the formation of the company arid the gathering of statistics.

/"Witness: Of various companies 'throughout the world. Who got these shares?—J. W. S. McArthur, C. G. Alcorn and several others. . IWhat did you get for your services? —five hundred 5s shares. Among otiiers was Mr. Glover-Clark, of Auckland. M , Mr. McArthur in Witness-box Charles Graham Alcorn was examined regarding the affairs of the Sterling Investments Company, and Alcorn, IJyower and Company, Limited. John William Shaw McArthur, managing director of the Investment Executive Trpst of New Zealand, also of the Southern British National Trust, sadd that part of the debenture money of the Investment Executive Trust was invested in debentures of the British National Trust. ?The Commissioner: Why invest debenture money from Company A in Company B? • Witness: To make money out of it for the original debenture-holders. They • net income from the investment. " When /did thesie series of companies start operations?— About three years ago. _ iAt this stage the sitting was adjourned. In addition to the 15 oompanies mentioned' in the report of the New Zealand Companies Commission, published in yesterday's Herald, the Royal Commission in Sydney is investigating the affairs of V. B. Mclnnes and Company (Australia), Limited, and the Mclnnes Company, Limited.

POLICE INTERVENE " "V OFFICES IN SYDNEY FORMAL POSSESSION TAKEN —(Keceived August 9, 5.35 p.m.) SYDNEY, .August 9 "When tjie Royal Commission began Its investigation of the operations of 17 companies to-day, Mr. R. Windeyer, K.C., who appeared for the Investment, Executive Trust of Now Zealand, Limited, and the Southern ' British National / Trust, Limited, protested against the action of the police in taking formal possession of the office of the companies he represented, thereby obstructing their business and creating an embarrassing situation for which thtfie was no legal warrant. l.)r. I*. Louat, who appeared for th« British National Trust, Limited, the British National Investment Trust, Limited, and the Sterling Investments Company of New Zealand, described the action of the police as high handed. It had prevented the directors haying access to their own books and records in order to prepare their defence. The Commissioner, .Mr. Justice Halsp Rftgers, replied that he had not authored the police to intervene. diis Honor said the companies affected had their remedy at law. He announced the appointment of two accountants f, om t ] le Auditor-Gen-eral s Department to take possession of books and papers and allow- officers Of: the companies access to them.