TRUSTS’ AFFAIRS

Southland Times, Issue 22487, 24 November 1934, Page 5

TRUSTS’ AFFAIRS

SYDNEY INQUIRY

DEBENTURE-HOLDERS’ CLAIM

GOVERNMENT INTERVENES

(United Press Assn.—Telegraph Copyright.) (Rec. 8.45 p.m.) Sydney, November 23. When the Royal Commission investigating the affairs of 31 trust companies resumed its hearing to-day, Mr Pitt, K.C., representing certain debentureholders, invited the Commissioner to consider the scheme put forward by Mr L. W. Swan, secretary of the New Zealand debenture-holders’ committee, to keep three companies in existence and liquidate the others. Mr Pitt outlined proposals for the control of the three companies and the method of electing directors, and stated that McArthur and Alcorn would be eliminated from any board. Robert Hill, accountant, who is assisting the Commissioner, gave evidence that the scheme was workable and would assist in the preservation of the assets, but the question of administration costs would have to be determined. He added that to sell the Trust building would be calamitous.

Mr W. W. Monahan, K.C., handed in a document which he said was a translation of a cablegram from the New Zealand Prime Minister. The document, which in his opinion omitted one or two essential words, set out that the New Zealand Government did not recognize Swan’s scheme as representing the wishes of the debenture-hold-ers.

The cable proceeded: “It is understood that the scheme was originated by a committee created as a result of a postal canvass by Messrs Levy and Madden after the former’s visit to Sydney for consultation at the request of McArthur. My Government is strongly of the opinion that no steps should be taken based on the alleged views of the debenture-holders till an authoritative disinterested statement of the facts has been communicated to them; also proper steps taken to ensure well-in-formed uninfluenced opinion by them.” Leonard Wesley Swan, public accountant, of Auckland, gave evidence that he first came into the matter when approached by a Mr Levy, of Wellington, who held about £2OOO worth of debentures. Levy was introduced by a Mr Richmond, a barrister. The Commissioner (Mr Justice Haise Rogers): Who is paying your expenses? Swan: The debenture-holders’ committee. The funds were supplied by Levy with an assurance that other de-benture-holders would support him to get the money back. Levy made it clear that the first step to be taken was to send a cable to McArthur. I then came to Sydney. I am returning to New Zealand convinced that so far as the Investment Executive Trust is concerned there is 20 shillings in the pound available. Replying to Mr Monahan, witness said he had had conversation with McArthur in Sydney. At this stage Mr Pitt examined the message from the New Zealand Government after which he declared that there was an inaccuracy to begin with as Swan had never suggested the scheme to the debenture-holders. The Commissioner (to Swan): 'What, in fact, did you put to the debentureholders? Swan: Nothing, sir. Replying further to Mr Monahan, Swan said he had read only about one third of a page of a certain publication referring to the “Kelly Gang.” The Commissioner said that the opinion of the debenture-holders ought to be obtained as soon as possible. The commission adjourned to a date to be fixed.