MISREPRESENTATION

Otago Daily Times, Issue 18322, 12 August 1921, Page 5

MISREPRESENTATION

AN AUCKLAND CASE (Peb United Press Association.) AUCKLAND, August 11. At the Supreme Court to-day, the third day of tho trial, Alfred Oscar Otto, managing director of the National Co-operative Realty Company, was found guilty of obtaining £4OO from James Mackay Linklater- by moans of false pretences. The Crown case was that the accused misrepresented the financial position of the company to Linklater, and thereby induced him to take shares in tho company. Accused represented that tho turnover was £IO,OOO, tho assets between £SOOO and £SOOO, and the liabilities about £IOO. When Linklater’s solicitor asked for tho books he was told that they were not written up, as tho firm being too busy making money, the balance sheet was not made out. The solicitor advised against investment, but Linklater invested, and was engaged also as a salesman. Shortly afterwards Linklater discovered in tho office a statement signed by accused showing that tho liabilities were £2186 and the assets £2OO less. Immediately he joined the office Linklater was asked for a loan of £2OO on the ground of financial stringency, and to keep the cornpc.n-- afloat. In March, a distress warrant for £l4l was issued against the company, Linklater paying the amount and taking a bill of sale over the company’s furniture. In addition, he ad-' vanced £ll3 to pay the rent, the typist, and legal expenses. The defence was thftt accused honestly believed what he represented, and that the statement in question did not show the assets • only tho liabilities. The pnbl'c accountant evidenced that a comparative statement of affairs for the same period showed that the company was at that time in a fairly substantial position, the assets exceeding (he liabilities by £5452, leaving out fully paid-up capital to tVTo amount of £5755. which was a liability, but was balanced by goodwill of a similar amount. Ho -admitted it was purely a paper balance sheet, but stated that, it was drawn from the company’s books. The jury recommended mercy on account of the wife and seven children of the accused. Sentence was deferred.