INVESTED FUNDS

New Zealand Herald, Volume LXXI, Issue 21911, 21 September 1934, Page 11

INVESTED FUNDS

OVERSEAS COMPANIES EXTENT OF HOLDINGS SEARCHING QUESTIONS TOTAL OF ONLY £llOO By Telegraph—Press Association—Copyright (Received September '2O, 11.15 p.m.) SYDNEY. Sept. 20 In the course of his examination-of Mr. J. W. S. McArthur at to-day's sitting of the Royal Commission, which is investigating the affairs of certain companies, Mr. Monahan read a letter which, he said, Mr. McArthur had sent to 22 agents in towns in New Zealand, which gave a list of holdings in overseas companies, hut did not disclose tho extent of the holdings. Mr. Monahan (turning to Mr. McArthur): You refer to the Canadian Pacific Railway, with a capital of £95,000,000. 1 understand you had £lO2 in that? Mr. McArthur: Yes.

You refer to Lever Brothers, with a capital of £59,000,000. You had £l4O worth of that? —Yes.

Then you mention the International Nickel Company. You had £llß in that ? —Yes. How much did you have in Imperial Chemical Industries?--About 100 siiarcs.

Do you think that honest?—l admit we had a small holii.Mig at that time, but we intended to increase it..

Your debenture capital now is £400,000, and all that you had invested in these companies when you dangled them before investors' eyes was £lloo?—That was at that time, but the exchange went against us. Instructions Given to Salesmen

The Commissioner: What did you tell investors to expect from these companies ? Mr. McArthur: From 6 to 7 per cent, perhaps more. At a later stage Mr. McArthur said he had taken exception to some statements made by salesmen who were selling Trust debentures, with the result that about 30 agents were brought to Sydney from other States and from New Zealand to attend a sales convention, at which he gave certain instructions.

Witness said he also learned that certain salesmen were representing themselves as officials of the Primary Producers' Bank. He instructed Messrs. Hewitt and Mclnnes that if misrepresentation were proved those who wanted their money back could have it. Mr. Monahan: As the result of litigation, or voluntarily? Mr. McArthur: Voluntarily.

The Commissioner: I suppose if the hawking of shares were prevented in this State it would very seriously interfere with your business, would it not? Mr. McArthur: I do not think it would. We have no objection to wiping out business methods which are not right. Mr. Mclnnes' Rent-free Offices Earlier in the proceedings Mr. McArthur had said that an arrangement had been made that Mr. V. B. Mclnnes should occupy offices in the Trust Buildings, Sydney, rent free until he was able to pay rent. The Commissioner: How much has he made out of the Southern British National Trust, Limited? Mr. McArthur: Mr. Mclnnes tells me he has not made any profit. He made a loss.

As a matter of fact he had been overpaid £4OOO up to June? —Yes.

He has retained £4334 that belongs to the Southern British without making an attempt to pay it over.—Mr. Mclnnes made an attempt to pay it over. The debt has not been allowed to be extinguished. Mr. Mclnnes had to sell shares in V. B. Mclnnes and Company and pay the debt. That undertaking was given about two months ago. The commission then came along and he has not been able to do anything. Matter Not Satisfactorily Explained Had Mr. Mclnnes any justification for taking that money?—l do not say he had. He disputes the amount. He held money received on your account and kept it for his own use? — I would not say that until he had an opportunity of explaining the position.

The Commissioner: But he must have had an opportunity of explaining it.

Mr. McArthur: Well it has not been explained to our satisfaction. The commission adjourned until tomorrow.