CHAIN STORE CASE

Otago Daily Times, Issue 24775, 27 November 1941, Page 3

CHAIN STORE CASE

CHARGE OF CONSPIRACY EVIDENCE OF INVESTORS J. W. S. McARTHUR’S AFFAIRS SYDNEY, Nov. 20. The hearing of a conspiracy charge against John William Shaw McArthur, aged 58, manager, Arthur Bridgewalei, aged 36, director, William Bryce, aged 40, salesman, and Arnold Lovell, aged 49, director, was continued in the Sydney Police Court this week.

When the case was opened on October 2 the Crown Prosecutor, Mr C. V. Rooney, said that McArthur and Bridgwater were directors of Investors’ Agency Proprietary. Ltd., and Lovell and Bruce were employed by or acted as salesmen for the company. Persons had been induced to sign a syndicate agreement which the Crown alleged was “entirely illusory’’ and never conferred any rights on persons claiming benefits in the syndicate. Contractor Contributes £2OOO

Thomas Kennard, retired Sydney contractor, said Bryce told him the cooperative companies which the Investors’ Agency was starting were issuing an extra bonus share for every two shares purchased. Kennard said he discussed with gryce the five companies in which he held shares, and Bryce gave him reasons why he should sell out immediately and invest in Investors’ Agency, On Bryce's representations, he allowed Investors’ Agency to sell certain shares for him, and he made the amount up to’ £2OOO, which he invested in the company and signed an agreement. Replying to Mr Shand, Kennard said he did not read the agreement. He thought he was getting a sure 8 per cent, in a going concern and an extra £IOOO in an absolute security. “A Glowing Picture *’

Ellis Gulliver, a Sydney pastrycook, stated in evidence that McArthur called* at his home and said he needed somebody to put money into a chain of cooperative stores. It was an organisation that would manufacture everything once it was started. “He painted a glowing picture and said he would guarantee 8 per cent, profit. Each £IOO invested by original shareholders would immediately be worth £ 150. guaranteeing 12 per cent.” witness said. “His main concern seemed to be to get the money in. and when I said I would invest £IOO he asked me to make it £2OO. He said I should be doing the right thing for my country in investing in the co-onerative scheme. I wrote out a cheoue for £IOO. He asked me to make out the cheoue to Investors’ Agency, the company financing the scheme, and handed me a share certificate.

• “ I subsequently snoke to him about the winding-up of the Randwick /suburb) society and asked did it mean that my £IOO was gone. He sad: - ‘Yes.’ I have not since received anv communication about the fate of mv money.”

The Raising of Capital Mr J. W. Shand: You knew tha„ under the Federal regulations the company was not allowed to raise more capital? Witness: It still was not necessary to close-two stores. I heard in the office of the member for Watson, Mr Falstcm, that the Federal regulations did no’; permit them to raise more capital. Mr Shand: Do you deny you knew that,Mr Falstein was endeavouring lo get the Federal Government to allow this company to raise the capital? Witness: No. Sydney Carruthers, managing director of Chubbs’s Australian Company, Ltd., said that in June, 1939, his company made a fire-resisting safe foi McArthur. An amount of £3 2s Cd was paid, leaving a balance of £60.. McArthur requested that Chubbs take debentures in Business Managements Proprietary, Ltd., for that amount, anus an agreement was made. Detective Constable Stanley Joseph Corby said that when he read to Lovell on October 28, 1940, a statement made by a Miss Peterkin. Lovell replied, “ It serves me right. Mr Corby. I should have known that anything McArthur was in was crook.” 1 The case was adjourned.