MCARTHUR COMPANIES

Poverty Bay Herald, Volume LXIII, Issue 19123, 18 September 1936, Page 6

MCARTHUR COMPANIES

TRANSACTIONS TRACED EVIDENCE IN COURT TRANSFERS AND LOANS (Per Press Association.) AUCKLAND, this day. Further information about the formation and activities of a number of the companies belonging to what is known .as the “McArthur group’’ was given during the hearing of the Redwood Forests case in the Supreme Gourt yesterday.

K. C. Aekins, solicitor, said he had been chairman of directors of the Sterling Investments Company from its incorporation, and still was a director. His co-directors had been C. G. Alcorn and Glover Clark, but Clark had resigned after about two years. No cash was subscribed by the shareholders at any time, and as far as he knew, the cash to start the company came from the Investment Executive Trust. McArthur and Alcorn really ran the company, and dictated all its policy and carried it out. He never did anything on his own initiative, but on the instructions of McArthur or Alcorn. CHEQUES FOR, £(30,000 The witness said he knew the Sterling Company was buying Investment Executive Trust debentures, and these were being bought by V. B. Mclnnes and Company, and being taken over by the Sterling Company. He understood that the object of buying those debentures was to keep up their price. He remembered some transactions dealing with McArthur’s Hillsborough property, ,and he thought the Sterling Company took it over and also some Newmarket property that belonged to McArthur.

The witness identified signatures on a cheque of February 28, 1934, of the Sterling Investments Company to J. W. S. McArthur for £60,000, and also a cheque of the same date for £60,025, drawn by the Wynwood Investments Company in favour of the "Sterling Company.

Mr. Johnston: I would like to see a cheque of this size. /

Mr. Barrowelough: My friend has not been long enough in this case, or he would have seen dozens of them. That’s a mere bagatelle.

Norman Alexander Duthie, public accountant, said he was one of the inspectors appointed by the Government to investigate the affairs of the. various companies. The witness described the origin of the Kotahi Lands Company and said the Edgecumbe ForestsCompany acquired all the shares in the Kotahi Company. SALE OF 21,000 ACRES The witness said that in May of 1931, 21.224 acres was sold to Timberlands Woodpulp, Limited, 'for £33,350. The Timberlands Company gave a mortgage back for £28,350, leaving £SOOO, which was apparently paid in cash. The Edgecumbe Company was wound up in March of 1933, ana the books were handed to the Sterling Company for safe custody. When £SOOO was paid back off the Timberlands .Company’s mortgage, it was in part distributed in loans, free of interest, to the shareholders, and loans of £3O Ss and of £750 were made to McArthur. The witness traced further repayments of £SOOO off the Timberlands Company’s mortgage, and said that £ISOO and £IOSO were advanced to T. E. McArthur, who, he believed, was a son of J. W. S. McArthur. Sums of £4600, £7750 and £9OO were lent to the Sterling Investments Company.

“The Sterling Company, on March 6, 1933, paid the Edgecumbe Company £19,300 in the purchase of its assets,” said the witness. ‘ ‘ This was two days later lent back to the Sterling Company on deposit at call at 34 per cent. This £19,300 of unsecured loan was an asset of the company and passed as such into the liquidators’ hands.” The hearing was adjourned.