ALLEGED FALSE PRETENCES

Otago Daily Times, Issue 20875, 15 November 1929, Page 10

ALLEGED FALSE PRETENCES

QUARTERLY DIVIDENDS CASE. CHARGE AGAINST SECRETARY. (Special to Daily Times.) INVERCARGILL, November 14. In the Supreme Court to-day David Neilson Johnson, of Dunedin, representative of the English organisations, Quarterly Dividends Ltd. and National House Purchase Ltd., faced six charges of obtaining money by false pretences. The accused, who was represented by Mr White, of Dunedin, pleaded not guilty. The Crown Prosecutor (Mr H. J. Macalister), addressing the jury, stated that the companies were promoted in England by one William Taverner, who, in 1928, toured New Zealand, organising his companies in the Dominion. The accused had been appointed secretary for New Zealand, and had conducted an active campaign for depositors. The two companies were in reality one concern, operating as two companies, but under the control of one man. The companies were small concerns, with a few shareholders who were in control. Learned counsel stressed the fact that the depositors did not become shareholders, but merely deposited their money for investment, and had no say in the control or management. The money having been deposited, a series of “paper loans” were granted to the depositors until the £SOOO class was reached, when, it was stated, the_ depositors would be entitled to draw dividends ’on that amount for the rest of their lives. The dividends were also stated at 20 per cent., moking the dividend £IOOO a year, a . very handsome reward for the original investment of £2 Is. The allegation against the accused was that he had informed prospective depositors that by the payment of £2 Is and 15 monthly payments of £1 depositors would reach the £SOOO class in seven years and a-half. He would call the best actuarial evidence to show that the waiting period for the second loan of £SO would be 10 times the 'waiting period for the first loan, which, the experience of New Zealand depositors indicated, would be four years. The waiting period for the second loan would, therefore, be 40 years, and so on down the list, the waiting period automatically increasing down the list. Mr Macahster reviewed the evidence at some length, and said that the Grown would call evidence to show that the accused knew that the scheme was unsound, and bad, in fact, been informed that it was Imsound. . „ Elizabeth Kennedy, draper, of Tuatapure, gave evidence that in March last the accused had paid her a visit at her shop. He explained that he was travelling in connection with National House Purchase, Ltd. The accused, who was also selling Bibles, explained the wort ings of the two companies and produced n chart with which he illustrated his reCorroborative evidence on the lines of the testimony in the Lower Court was given by the following investors m the companies:—Elizabeth Williams, draper, of Tuatapere; Matthew Mair, of Tuatapere; and Irvine Skeoch, of Tuatapere. The two last-named said they had endeavoured to demonstrate to the accused that the scheme was unsound. Under cross-examination by Mr White the witness Skeoch admitted that at first he had had considerable faith in the scheme. Adeline Horsham, a married woman, residing at Riverton, gave evidence that she and her husband had made the initial payment, but had been unable to afford any subsequent payments. She had faith in the scheme and in the accused. Evidence similar to that given in the Lower Court was tendered by William Forbury Sutton, commission agent, Invercargill; Thomas James Henry, accountant, Invercargill; Robert Pringle Inglis, motor mechanic, Invercargill; Lawrence Flaws, farmer, Earnsclnugh; Louis John Anderson, hairdresser, Cromwell; Daniel Moir, an employee of the Otago Harbour Board, Dunedin; Henry Nuttall, detective-sergeant, stationed at Dunedin; and by Cecil Gostlelow, an officer of the Government Actuary’s Department.

Two witnesses stated, inter alia, that they were so far quite satisfied with the working of the scheme. The court adjourned until to-morrow.