COMPANY INQUIRY

New Zealand Herald, Volume LXXI, Issue 21396, 20 October 1934, Page 13

COMPANY INQUIRY

SYDNEY SITTINGS INTERESTS OF INVESTORS COMPLAINT BY COUNSEL NEW CONCERN'S SHARES ALLEGED OFFERS MADE By Telegraph—Press Association —Copyright (Received October 19, 8.5 p.m.) SYDNEY, Oct. 19 The I?oval Commission which is inquiring into the activities of 31 companies continued its investigations today.

Mr. Justice Halse Rogers presided as Commissioner, Mr. W. W. Monalian, 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.

Allegations that attempts had been made to induce debenture-holders in the Southern British National Trust, Limited, to exchange their holdings for shares in another company were made, by Mr. Fuller. Debenture-holders' Protection

Mr. L. S. Abrahams, K.C., announced that he had been asked to appear for certain debenture-holders whose names were contained in a petition to the Commissioner. They did not desire to disclose the contents of the petition at the moment. These debenture-holders had combined to protect themselves from people who were opposing their interests. They wished the Commission to send a circular to all the debenture-holders with a report of its findings before making a second report recommending alterations. Mr. Abrahams said it was desii'ed to form a debenture-holders' protection association so that submissions might be put before the Commissioner as to what he might recommend. Another counsel, Mr. Selwyn Betts, said he had substantially the same instructions from another group of de-benture-holders. Suggested Exchange of Holdings The Commissioner said that any help from people who submitted the views of the debenture-holders would be very acceptable. Mr. Fuller said he had no objection to representatives of the debentureholders appearing, but a frank statement should be made before counsel were allowed to appear. He had been informed that debenture-holders had been approached in Brisbane with the; suggestion that they should exchange their debentur6s for shares in another company controlled by a person who had appeared before the Commission; also that one of the directors of the company was an agent for Mr. V. B. Mclnnes.

The Commissioner said he would not support any suggestion that any company with which Mr. Mclnnes had any connection should have anything to do with the taking over of the affairs of the companies.

Commissioner's Definite Stand Mr. Fuller said that one of the directors of the company to which he had referred was Foster. The scheme was that debenture-holders in the Southern British National Trust, Limited, should handover their debentures in exchange for shares in another company, and that the Commissioner should value the debentures and get the debentureholders to hand them over to this other company. The Commissioner: I am not going to do anything like that, whatever happens. One of the main objects of thia commission is to try to preserve the interests of the people who have invested their money in these companies. Continuing, the Commissioner .said it appeared to be necessary to call meetings of debenture-holders, but he did not know who would bear the cost of sending circulars to all the debentureholders with copies of his findings on the facts. Mr. Abrahams stated definitely that he did not represent Mr. Mclnncs' interests. "On information 1 have at present," he said, "there is bitter hostility to Mr. Mclnnes. As regards Foster, T never heard his name."

The Commissioner said he thought the debenture-holders should be warned to be very careful about accepting suggestions to put money into any company on the basis that it would be authorised by the Commission to take over assets.

It would not be competent for the Commission to make such a proposal and there was very little likelihood of the Legislature adopting that method of settling the affairs of the companies. Probably he would recommend to the Government that a receiver of the assets, aB. far as they came within the jurisdiction of New South Wales, should be appointed, so that during the time steps were being taken to ascertain the desires of the debenture-holders there would be no possibility of the assets being dealt with in any way. Mr. H. S. Nicholas, who appeared on behalf of the New Zealand Government, submitted that the transactions which were the subject of cablegrams between Mr. H. M. Hampson and the Commission should not be inquired into by the Commission. Mr. Hampson, solicitor, of Auckland, said he wished to contradict statements made in the New Zealand Commission's report. The Commissioner said he could not accept the position of judge between the New Zealand Commission and Mr. Hampson. Mr. Hampson was proceeding to make a statement about lledwood mortgages when the Commissioner remarked that it appeared to have nothing to do with what he was investigating. "If you do not choose to give this evidence before the New Zealand Commission," said His Honour, "it seems extraordinary that you want to give it before me." The Commission then adjourned until ]Jdonday. ____________