CHARGES OF FRAUD

Taranaki Daily News, 14 April 1932, Page 12

CHARGES OF FRAUD

TWO ACCUSED SENTENCED. FALSE PROSPECTUS ISSUED. London, April 11. The trial arising out of the conduct of Scottish Amalgamated Silks, Ltd., has ended after 33 days’ hearing—the longest criminal trial in Scottish history. Of th© seven defendants who were ultimately placed in the dock, Alexander Youn<r, Wigan, was sentenced to three vears’ penal {servitude, and George M. Todd, Glasgow, to six months. The remaining five were found not guilty or the charges not proven. Accused were charged with defrauding the public of £438,000 by a false proeA sensation was caused in Scottish business circles on February 16, 1931, when it became known that the chairman, vice-chairman, seven directors and four other people had been arrested in connection with the affairs of the ScoL bis'h Amalgamated. Silks, Ltd., then in liquidation. Nine of the ■arrests took place in Scotland— chiefly in Glasgowand three in England. Alexander Young was a director and G. M. Todd was secretary of the company. Subsequently the charges against six of the arrested men were withdrawn. Never in the history of Glasgow had arrests on such a big acale .been effected, in connection with any one charge, and the news almost stopped business on the ' Glaso-ow Stock Exchange,, where the arrests” became the one topic of conversation. All the men were well known in Scotland, and some .of them throughout the financial and industrial world. . The accused were charged with having formed a fraudulent scheme to obtain money from the public by false representation and pretences in connection with Scottish Amalgamated Silks, Ltd., and with having obtained sums of money amounting to £438,000 or thereabouts subscribed by the public, which it was ■alleged had been appropriated to their use and to defraud the public thereof. About a month previously the police had taken possession of the company’s books, and it was after examining these that the Crown ofliceis of .Edinburgh issued the warrants. Detectives from various Glasgoiv divisions were mobilised to carry out the arrests. These were made with dramatic suddenness, detectives visiting the homes and places of 1 business, and taking the men in taxis and police vans to the police station. No word was alloAved to leak out of the drama that was in progress until almost every man was at the police Station. Upon learning Avhat had occurred members of the families of the men rushed to the police station, and in some cases they were allowed to see the accused under police escort. Scottish Amalgamated Silks, Ltd., was fdrmed in 128 Avith a nominal capital of £2,000,000. In July, 1928, the com-' pany issued a prospectus and invited the public to subscribe for preferred ordinary and deferred shares to the extent of £1,295,000. Little more than two years later, on September 17, 1931, an extraordinary meeting of shareholders passed a resolution. placing the company inliquidation. It had never paid a dividend. Underwriters and sub-underwriters were said by the auditors of the company on the first balance-sheet published to have failed to pay calls amounting to £419,112 on shares allotted to them. Shareholders’ meetings were usually described, as stormy, and finally a committee of shareholders was appointed to investigate the position.