COMPANY AFFAIRS

New Zealand Herald, Volume 81, Issue 25021, 11 October 1944, Page 7

COMPANY AFFAIRS

EXISTINGJORESTS hiquiry BEFORE judge , iM bEH output forecasts , mihlic examination ot Charles Tbe P Macindoe. merchant (Mr 6fl 0rs ° D oncerninn his a-sociation with I* . ' uwsts, Limited, in liquidation. ffa3 tnrd'iv I'wo former directors F* "i'l.'v John Derek Prime (Mr -'"In 1 AMiert \V,H----1 yve also been summoned for exW „ The inquiry is being cou--81,111 i hv Mr Henrv on behalf of the (I 'f e ,i Assignee. Mr A. W. Waiters. nUctissinp the prospectus of October rt 1931 witness said it. was placed 1 I tl'.P directors of the company be ° r0 at the time of signature. There no reports from any of the ex*l available at the time the prosP cr * . vas signed. Ho assured the f tors that it was in order, for the n that it had been perused in Aus--5 sent fonva, ; d cer f; fied ? T Vs between himself and the directors he took full responsibility for the prospectus. Recovering £SOOO nntnpss said he had never thought « AVBrina the £SOOO he had aavariced f New 'Zealand Investment and Sellto any, the company formed to fSne Forests' bonds. In October, foil the selling agents became Inter--1 Brokers of Australia. I hey were ! ill the bonds for £35, of which the t° f'Ln was to go to the brokers, the to the forestry company, the to the brokers, the next Co to 1" toestrv company, the next £2 ♦the brokers and the final to to the ", 1 ' The forestry company was to £l3 from each bond, of which there S more than 5000 for sale. Witness Seed that Mrs Macimloe, who confliUl the company, stood to receive fleast £60,000 for this block, and this meant brinpne the price back to somolike £l2 an acre. 4 Witness .said he did not tell rcpreJ ative men interested in Sydney that Mr E H. Snow had reported that foßo acres of the block had no bush rail on it, because ho knew that rert was not correct If there was 120000 000 feet of timber on the property as stated in the prospectus that vould show well over £ooo.ooo net P price of Bonds Witness said he had objected very .tronelv to the terms of a selling agreement made in November, 1932. with tWinc Timber Brokers, Limited, which fired the price of each bond at £35 and ca ve the brokers power to increase or decrease it. In February. 1933, he made an arrangement that £I2OO should be advanced from money coming in from the sale of bonds to National Investments, Limited, to expedite the sale of bonds At the meeting of directors in September, 1934, he possibly gave them an assurance that the altered figures itr the new prospectus were correct. He accepted his share of responsibility for that. The anticipated return_froni the area was increased from £73 to £IOO an acre. The prospect of returns from the property was no brighter in April, 1934. than it was in 1931, but the position depended entirely on the sale of bonds. He would say that an estimate in April, 1934. of getting returns within three vears and nine months was justified. In six years about 600 bonds were sold, and they needed to sell about 2000 to . enable the work to go ahead. It was true in fact, as stated in a prospectus, that there was a "present magnificent forest clothing em 5000 acres," and he would repeat that statement in a prospectus now Estimate of Timber Witness also agreed with the prospectus claim of 120,000,000 ft log measurement of ,mill a b 11? timber on the block, and in addition 50,000.000 ol tawa notmillable. but suitable for pulping That was based on reports of a number of experts. Witness said be could not contradict the statement that Existing Forests' directors held one meeting in 1931. one in 1932, and the next in 1934. They might have had a number of meetings that were not recorded. His Honor suggested that the witness should be asked some questions about his relations with the Shareholders' Mutual Protection Association, a matter which stood out in the official issignee's report. Asked when the association first threatened action against Existing Forests, witness said they were always threatening action. His Honor asked when the complaints from bondholders iri South Australia were first brought definitely to the notice of Mr Macindoe or the directors. Mr Leary: On May 10, 1935. His Honor: That is what the correspondence shows, but there might lave been complaints before that. Writ for £6OOO Witness said that by May, 1935, he knew that allegations of misrepresentation in the prospectus were being made. A,circular was sent by the trustees in Australia to each bondholder refuting the allegations He and the directors had a writ served on them for £6OOO. An agreement was reached between Existing Forests and tbe Shareholders' Protection Association in July, 1936, under which tbe company was to pay the association £SOOO, and the association was to withdraw all the imputations it had made against the company. The £SOOO was not paid. Mr Leary said the official assignee's report contained three broad alienations. The first was that extravagant promises were made in regard to the afforestation scheme from which the bulk of the money would be coming to the bondholders. The second was that the forecast of the extent of milling timber and the reward to be won was exaggerated to the point of being misleading with intent. The third was that the estimates of timber put in the Prospectuses were not genuine. A Further Allegation It was further alleged that Mr Macindoe was so identified with the Prospectuses both in Australia and here that, he must accept complete responsibility for any erroneous matter in tnem. Mr Leary referred in detail to the ca mpaign to make New Zealand timberconscious carried on by the Forestry Department. since its formation in 1920. i? G , P'-'t in and explained plans of the Existing Forests property, and said rePorts would substantiate that there Jera 152,000,000 ft of millable timber on ! ■ Mr Macindoe was not a promoter, Www offered a proposition by a group '•Sydney financiers, who were very well IT n tr n rPai PS,llt '' matters , His Honor: He was the promoter, and e identified himself with it. hater. His Honor commented that f wlle » Mrs Maeiud oe sold the property r £70,000 the Government valuation Ta s something like £SOOO jLeary: The Government valuation i, include the value of the timbe£ That is the law. 116 hearing will be continued today Appeal for town clerk Enu re ' ease °f its town clerk, Lester l!n„ rS i.T a S ef l 34. married, from the snnnii. i Zealand Air Force, was at 5 t'hf Papatoetoe Town Board Anno 8 ? ti l " 1 Armed Forces thl 1 .Board yesterday. In evidence wig chairman of the Town Board. Mr j. • Traeev said the work was at being carried on by a woman 8 J ~l at .the Otahuhu town clerk was Th "i? ,n nn nflv < s °ry capacity. s board made no recommendation, j