THREAT OF A WRIT

New Zealand Herald, Volume LXXI, Issue 21910, 20 September 1934, Page 11

THREAT OF A WRIT

DEBT TOTALLING £6147 MR. McARTHUR EXPLAINS MONEY DUE TO CROWN ALLEGED UNFAIR ATTACK By Telegraph—Press Association—Copyright (Received September 19, 7.45 p.m.) SYDNEY. Sept. 19 In reply to further questions at today's sitting of the Royal Commission which is investigating the affairs of certain companies, Mr. J. W. S. McArthur said he came into business association with Mr. C. G. Alcorn in 1931 whep he placed him on the directorate of the Investment Executive Trust of New Zealand, Limited. Mr. W. C. Hewitt, at that time, was Mr. Alcorn's solicitor.

Mr. McArthur admitted thllt about that time he received a letter from Alcorn, Trower and Company, Limited, in connection with a debt he owed to that company amounting to £6147. This debt had been contracted some time prior to the formation of the Redwood Forests Company. Mr. Alcorn had helped considerably in the formation of the company. The demand came through an agency of which Mr. Alcorn was the principal and a writ was threatened.

Mr. Monahan: At that time you had nothing at all? Mr. McArthur: I had very little. I had assets, however, which turned out to be substantial.

Protecting an Interest From Creditors Was not it pretty rough on you for him to make a demand on you through his solicitor?—l suppose he was forced to do it. He sort of forced himself to threaten you with a writ? —Yes. Does it ririg true to you, all this business? —He was protecting me as well as himself.

It was a stage-managed affair, wasn't it? You got him to write that letter?—l did not request him to write the letter.

The position was that you had made up your mind you were going to take up a big block of shares in the Investment Executive Trust, Limited, and you feared your creditors would seize on them. Is that not so?— That is so.

And you got this letter and arranged to transfer your shares to Mr. Alcorn? —That is so.

You now admit that the whole of this arrangement was to protect your interest in the Investment Executive Trust from your creditors? —It was. Crown's Action Criticised * Questioned about a sum of £1650 allotted to him by the Investment Executive Trust for services rendered Mr. McArthur claimed that information he had collected was worth more J;han £1650. Further examined by Mr. Monahan. Mr. McArthur said he had transferred certain shares to protect himself against unfair attacks. Mr. Monahan: Was it an unfair attack for the Crown to aek you for money due to it? Mr. McArthur: It was an absolute swindle by the Crown. Continuing, Mr. McArthur said he had asked for time to pay but had told the Crown it was a swindle. The commissioner said that Mr. McArthur might have been quite justified—as he claimed —in stripping--him-self of his assets, but he had not been quite frank with the Crown Solicitor of New Zealand. Nature of Statement About Assets Asked by the Commissioner why he had not revealed that he, as Modern Homes, had £2375 worth of assets, Mr. McArthur said he thought he was perfectly justified in making an untrue statement so that he could postpone payment of the debt, which he regarded as unjust. .The Commissioner: Then you think untrue statements are justified in business dealings? Mr. McArthur: They made an untrue statement to me. Mr. Monahan: You took certain steps through your companies against any chance of your assets being taken by your creditors?

Mr. McArthur: That was against unfair attacks.

After further questioning Mr. McArthur admitted he had paid the debt to the Crown through the Sterling Investment Company out of the Investment Executive Trust's debentures. Use ol Debenture-holders' Money

The Commissioner: So far as I can see the investments of the Investment Executive Trust were gambled on your solvency. It was all being used to protect your interests, and if you could not be protected the money put into that vanished. Mr. McArthur: The assets at that time were worth many times the value of the debentures. Unless it is shown to the contrary I shall report on this transaction that you gambled with debenture-holders' money. You paid the Crown Solicitor a private debt of your own with the Investment Executive Trust's money. Mr. McArthur subsequently said he had had an opportunity of looking at the share register of Modern Homes and found he had only a nominal holding.

The Commissioner: The point is that you thought you had made a false statement and considered it perfectly justified.

Mr. McArthur said he was considerably heated at the time because he considered he had been badly treated by the Crown. The main shareholder at that time had been his son.