GREAT TIN SWINDLE.

Poverty Bay Herald, Volume XLVIII, Issue 15740, 3 February 1922, Page 5

GREAT TIN SWINDLE.

THE BADAK CONSPIRACY

Flee- Tot. Copyright—United Press Assn.) (Received Feb. 3, 10.55 a.m.) MELBOURNE, Feb. 2. .

Evidence in the Badak case showed that Scarborough and Oft on were heavy shareholders when the crash came, though they had a chance to get out.

What is\ popularly known as “the Badak swindle” lias* described by the Melbourne Age as “admittedly flic most gigantic mining fraud ever foisted on the public of Australia,”

Thomas West Orton, mining engineer, was the Badak Mining Syndicate's representative in the Federated Malay States. The syndicate was formed in 1918, when under war conditions tin had reached the phenomenal price of nearly £4OO a ton.

Jii the latter part of 1919, and the beginning of 1920 Orton and another borer named Wilson sent sensational cables describing, the richness of the syndicate’s property. The £lO shares rose steadily to £750, and on February 17 another cable “Satisfied property good’’ caused a fresh hurst of excitement. j

Eager speculators, blinded witli dreams of countless millions pouring into their hanking account, paid up to £2OOO for-a £lO share, the scene on tlie Stock Exchange' resembling in a small way the madness on the London Stock Exchange at the height of the South Sea Bubble. “Pup” syndicates were hastily formed to take up areas near the Badak property, and shares in these soared to ten times their nominal value. Mr Orton returned to Melbourne; and was present at. a meeting of shareholders on 10th March, 1920, when the syndicate was floated into a company of £750,000, in 750.000 shares of £1 each, of which 400,000 fully paid shares went to the syndicate as vendors, equal to £l€oo tier £lO share, besides prior rights to a further 200,000 shares.* ' /The: “discovery” of this new Eldorado in the East was warmly eulogised, reference was made to the staunch and honorable dealings with the board, and shareholders enthusiastically voted Orton £16,000, of which £6OOO was to he cash down (in the form of application money on 30,000' shares). Early in August, however, the smash came. Mr H. S. Scarborough, one of the directors, had gone to the Malay States to check the test borings, -and he cabled that. 60 bores, had been put clown, and found valueless, and he was convinced the property was valueless. The price of the shares tumbled almost to nothing. The great, bubble had burst, numerous investors throughout the Stale, but particularly in the metropolisi and in Bendigo, being hit very hard. (Mon and 1 Wilson maintained that their reported values were genuine. Scarborough, on his return to Molbornc, confirmed his cable message, and admitted at a. meeting of shareholders that a week before ho had, advised the hoard officially I hat Hie property was valueless, lie had cabled a Co-director, Clark, who hold Scarborough’s power of attorney to sell shares, “Charlie hopelessly ill.”

These two were carrying the largest number of shares, and the message was an instruction lo sell out before the “deluge” came on. The company then sent, its manager, Mr J. I’. Raleigh, to Kedah to make an investigation, but Mr Raleigh was drowned most, mysteriously at Brisbane whilst on the return trip. Then the Victorian Government, in response to gtrong public clamor, supported by the Badak Company, which voted £250 towards the expense, sent Detectives Grieve and) Commons lo Kedah .to conduct an investigation into the whole unpleasant business. The issue of t.he warrant for the arrest of Orton was tho first outcome of their inquiries. When lie was arrested, lie had a very large sum of money in his possession. , Clarke and, Scarborough were arrested later and (ho three are being charged, with conspiring..to defraud.