FALSE PRETENCES.

Taranaki Daily News, 12 August 1921, Page 5

FALSE PRETENCES.

POSITION OF A COMPANY. MANAGING DIRECTOR’S GUILT. By Telegraph—Press AxßOciatien. Auckland, Laat Night. . At the Supreme Court to-day, th* third day of the trial, Alfred Oscar Otto, managing director of the National Cooperative Realty Co., was found guilty of obtaining £4OO from James Mackay Linklater by means of a falae pretence. The Crown case was that accused misrepresented the financial position of the ’company to Linklater and thereby induced him to take ehares in the company. Accused represented the turnover at over £lO,OOO, the assets at between £3OOO and £5OOO and the liabilities at about £lOO. When Linkhiter’a solicitor asked for the books he was told they were not written up; the firm was too busy making money and the bal-ance-sheet was not made out. The solicitor advised against investment, but Linklater invested and was engaged also as a salesman. Shortly afterward! Linklater discovered in the office a statement signed by accused showing liabilities of £2186 and assets £2OO less. Immediately he joined the office Linklater was asked for a loan of £2OO on the ground of the financial stringency and to keep the company afloat. In March a distress warrant for £l4l wa« Lssued against the company, Linklater paying the amount and taking a hill of sale on the company’* furniture. In addition he advanced £ll3 to pay rent, a typist and legal expense®. The defence was that accused honestly believed what he represented and that the statement in question did not show aseets but only liabilities. A public accountant gave evidence that a comparative etatement of affaire for the eame period showed that the company was at that time in ft fairly substantial position, the assets exceeding the liabilities by £5452, leaving out the fully paid up capital of £5755, which was a liability, but was balanced by the goodwill of a similar amount? He admitted it was a purely paper balantesheet, but it was drawn up from the company’s books. The jury recommended accused te mercy on account of his wife and seve» children. Sentence was deferred.