TRUST COMPANIES

Otago Daily Times, Issue 22365, 12 September 1934, Page 9

TRUST COMPANIES

THE ROYAL COMMISSION MAJOR JARVIE’S STATEMENT (United Press Association.) (By Electric Telegraph—Copyright.) SYDNEY, September 11. The Royal Commission which is inquiring into the activities certain trust companies continued its sitting. Major Jarvie made a statement regarding his association with MHnnes. Ho said he. had met M'lnnes through a member of a firm of accountants. He had never been associated with Foster, who, it had been alleged, had a criminal record.

Major Jarvie explained that, after accompanying M'Tnnes on a business tom of the country, he had been offered a directorship with the British Medical Investment Trust, and had accepted it. He had approached Dr Colvin, chairman of the Hospitals Commission, who was a life-long friend, and suggested that he, too, should become a director. Dr Colvin agreed, and both applied for 500 shares, paying £SO application money as provided in the prospectus. Later Dr Colvin resigned for health reasons, and his place was taken by Alcorn. Major Jarvie said that after further association with MTnncs and M‘Arthur he had been offered a position with the British National Investment Trust at a salary of £SOO a year, the appointment taking effect on April 1, 1934. The £125 he had been paid in June was for three months’ salary. When the British Medical Association objected to the name, the British Medical Investment Trust, it had beer%reso!ved to change it to the British Vocational Investment Trust. He did not know whether the change had been effected, because be resigned on August 8. Mr Monahan, K.C. (assistant commissioner) : The commission was appointed on August 8. Didn’t you resign after Parliament had taken action? Major Jarvie: No. Major Jarvie added that lie knew the Government intended to take action. Replying to Mr Monahan, Major Jarvie said his appointment was in an advisory capacity, but he was not expected to give advice in business matters.

Mr Monahan: So the only tiling you did was to give advice regarding those who were invited to attend the opening of the Trust building? Major. Jarvie: I attended at the Trust offices every day. Major Jarvie added that there had been nothing to do during July, though he had drawn his salary. He had actually never taken any part in the business transactions. COMPANY’S BOOKS MISSING

SYDNEY, September 11.

(Received Sept. 11, at 9 p.m.) Continuing his evidence before the commission, Major Jarvie denied having told MTunes that Dr Hunter approved of the name British Medical Investment Trust. M'lnnes’s evidence in that respect was inaccurate. Witness had merely asked Dr Hunter for approval for Colvin being on the board of this trust. Jarvie said he had retired from the board as he wanted, as a public man, to be free and to vote in Parliament free from association with trust companies. Mr Monahan: It was in your mind that there would be parliamentary action before you retired? Jarvie: Yes. I discussed the matter with the Premier. H. C. Glasson, secretary of the Investment Executive Trust,_ who was recalled, .was questioned with regal’d to the production of balance sheets. He said Sterling Investments balance sheet was the key to everything. Mr Monahan: And the books of Sterling arc missing? Glasson: Yes.

Continuing, Glasson said the books had been left by him in Auckland, but had disappeared. Apparently they Lad been removed from the office. Mr Monahan; I suppose without the books the truth will never be known? Glasson: 1 wouldn’t say that. Mr Monahan: Is there any doubt that as the result: of M‘Arthur’s and Alcorn‘s dealings with the books of these companies some, or one, or all of them have made £340.000 profit in connection with the trust building? Glasson: 1 could, not say. Mr Monahan: Isn’t it somewhere near that?

Glasson: On paper. Mr Monahan: M‘Arthur, as the result of these transactions, has a whole lot of assets of Wynwoods? Glasson : Yes. Ho has n charge over the assets. Mr Monahan : Such « charge that it makes him virtually owner of the lot. He has also property that belongs ro Pacific Explorations, including a yacht. That is all paid for out of of these transactions. Can you unravel it? Glasson: I am afraid I cannot. Mr Monahan: If you had Sterlings books would you be in a position to do it? Glasson : Probably. Tbc commissioner asked Glasson whether, he had altered the Southern British balance sheet on Friday afternoon as the result of M’Arthurs diiections. Glasson said he did not remember. The commissioner: I think you are inclined to fence with me. Glasson: No. The commissioner: Did you alter it on Friday? Glasson; Yes. Mr Monahan then quoted specific alterations, which Glasson said had been made at M'Arthur’s suggestion. After further questioning, witness said an expense item had been converted into an asset. Asked to explain how he had originally shown a list of investments in "other companies as an expense and afterwards put it on the other side as an asset, witness said that on reconsideration it was realised it was an asset in effect. Further reference to “X ” and “ Y companies was made when Mr Monahan

questioned Glasson regarding the investments of the Investment Executive Trust. The commissioner said he had to consider the interests of the companies. “ When people try to get control of a company by secrecy one suspects there is something wrong. It seems as if two well established New Zealand companies may get into the hands of people cm ploying such business methods as we have here.” Mr Monahan: What steps arc being taken by the Investment Executive Trust with regard to the Trustees, Executors and Agency Company of New Zealand? Glasson: I know nothing about it. Mr Monahan: It is a company with assets of three or four millions, comprising deceased persons* estates, is it not? Glasson: I believe so. Mr Monahan: Why are you trying to get control of those funds? Are they to be invested as these others have been ? Glasson: I know nothing at all about it. Mr Monahan: How much debenture capital has the Investment Executive Trust allowed the Transport Mutual for the purchase of the Trustee • Company’s shares? Glasson; About £14,000.

There is reason to believe that the two New Zealand companies to which reference is made in the proceedings before the commission are the Perpetual Trustees Estate and Agency Company, and the Trustees, Executors and Agency Company, both with headquarters in Dunedin. The Perpetual Trustees Company has never been approached with any proposal that it should sell it« business, and we are informed that, if any such proposal had been made, it would have been flatly rejected. The Trustees Executors and Agency Company of New Zealand, Ltd., is an old established Dunedin company, operating under a private Act of Parliament, passed in 1 SSI, for the administration of deceased _ persons’ estates. Its business is entirely different from that of the Executive Investment Trust, and the manager (Mr P. 0. Smellie) states that his company has had no dealings of any kind whatever with the M‘Arthur concern. The directors have known for some time that a movement was on foot to buy its shares, but, acting under legal advice, they have exercised the power given to them by the articles of association to refuse to register transfers. Only three transfers of shares sold, comprising altogether 125 shares, have been passed by the board within the past 12 months, and the transferee in each ease has been a member of the legal profession in Dunedin. “It would appear from the evidence now given before the commission in Sydney,” said Mr Smellie, “ that the action of" the company’s directors in rejecting transfers was fully justified.” The directors of the company are Mr G. R. Ritchie, Sir John Roberts, Mr P. C. Neill, Sir John Sinclair, Sir James Allen and Mr S. C. Sutherland.