COMPANY ASSETS

New Zealand Herald, Volume LXXI, Issue 21916, 27 September 1934, Page 11

COMPANY ASSETS

VALUES ESTIMATED ACCOUNTANT'S EVIDENCE LEVELS OF DEBENTURES 14/6 TO 19/5 IN POUND TRUST BUILDING THE KEY By Telegraph—Press Association—Copyright (Received September 26, 9.15 p.m.) SYDNEY, Sept. 26 The Royal Commission which is inquiring into the activities of 31 companies continued its investigations to-day. Mr. Justice Halse Rogers presided as Commissioner, Mr. W. W. Monahan, K.C., and Mr. J. B. Collier appeared as counsel assisting the Commission, Mr. R. Windeyer, K.C., and Mr. B. Fuller for the Investment Executive Trust of New Zealand, Limited, and the Southern British National Trust, Limited, and Dr. F. Louat for three other companies.

Robert Hill, accountant, of Sydney, said that at the request of the Crown he had inspected the books of the companies involved in this inquiry. His calculations were on three alternative bases, namely, that the Trust building in Sydney was worth £250,000, £300,000 and £400,000 respectively.

The assets in the British National Investment Trust were £105,173. Deducting £55,040 for the preference shareholders, the balance available for the ordinary shareholders in the British National Trust ' was £50,133, which would be received in cash frcm the British National Investment Trust. The shares of the latter company totalled 292,661. He placed no value on the shares of Sterling Investments, because that company, on its balance-sheet, was insolvent. That company's capital was only £472. He had brought in the book value of sundry debtors at £96,776, Sterling Investments being shown as debtor for £91,356. Cover lor' Debentures The total of assets available to cover debentures in the British National Trust was £157,817. The debentures issued by the British National Trust, with accrued interest, totalled £415,583. Therefore British National Trust debentures were worth 7s 7d in the pound. Mr. Hill said that according to the various bases of calculation mentioned, Southern British National Trust shares would be worth 15s 3d. 16s 6d, or 19s Id in the pound.

Dealing with the Investment Executive Trust, he said with the value of the Trust building at £250,000 the security for the debenture capital would be worth 14s 6d in the pound. With the building valued at £300,000 the debentures would be worth 16s Id in the pound, while at £400,000 the value of the debentures would be 19s 5d in the pound.

Dealing with the security of the company on the basis of the Trust building being valued at £250,000, he said there was an apparent deficiency of £83,634, while if the value of the building were given at £300,000 the deficiency would be £59,051. At the value of £400.000 the deficiency would be £9655. Books Not Available Continuing, Mr. Hill said the books of eight companies listed for investigation were not available, and in many of the others no entries had been made. British National Investment Trust had no books when the inquiry opened, and he did not think any had been acquired since.

British National Trust had none at the beginning of the inquiry, but new books had been purchased and written up. In every case information for the entries had been obtained from memoranda in the company's offices. The books of the Investment Executive Trust and the Southern British were fairly complete. Mclnnes and Company had asked for time to bring their books up-to-date. Mr. Hill said he had been surprised to find none of the companies had taken out trial balances for six months. When balance-sheets were eventually drawn up, numerous ' alterations had had to be made from time to time. Varying Balance-sheets On September 7 at 3.15 p.m. he had received from the Southern British a balance-sheet showing a profit of £438. At 5 p.m. the same day be had received one showing a profit of £3816. The third and latest balance-sheet gave the profit at £6625. The Commissioner remarked that it might be arranged for trust companies' books to be audited every month or three months by inspectors, although he knew there was strong objection to Government interference. However, some force should be given to the word trust, and if money was collected for investment there should be some supervision to see it was safeguarded. The Commissioner also stated that those connected with the companies, if they wished to carry on, should, before the termination of the inquiry, propose some sound scheme by which they could carry on "as plain, straightforward, honest-dealing companies." The main companies could then be put on a proper footing, and minor subsidiary companies wiped out. . The Commission then adjourned until to-morrow.