INQUIRY OPENED

Taranaki Daily News, 10 August 1934, Page 5

INQUIRY OPENED

PRINCIPALS IN THE BOX PROMPT ACTION AT SYDNEY POLICE CONTROL OFFICES PROTEST MADE BY COUNSEL , Wk EVIDENCE OF METHODS By Telegraph—Press Assn.—Copyright. Rec. 7.50 p.m. Sydney, Aug. 9. When the Royal Commission of inquiry into the operations of 17 companies opened its sittings to-day Mr. R. Windeyer, K.C., appearing for the Investment Executive Trust of New Zealand Limited and the Southern British National Trust Limited, protested against the action of the police in taking formal possession of the office of the companies he represented, thereby obstructing the business and creating an embarrassing situation for which there was no legal warrant. Dr. F. Louat, appearing for the British National Trust Limited, the British National Investment Trust Limited and the Sterling Investments Company of New Zealand, described the police action as high-handed and preventing the directors gaining access to their own books and records in order to prepare their defence. The Royal Commissioner, Mr. Justice Haise Rogers, replied that he had not authorised the police intervention. Ihe judge said the companies affected hhd a remedy at law. He announced the appointment of two accountants in the Auditor-General’s department to take possession of the books and papers and allow the officers of the companies access to them. William C. Hewitt, a New Zealand solicitor now residing at Sydney, was the first witness. He said he was a director of the British National Trust Limited, registered at Canberra. He was also agent at Sydney for the British National Investment Trust. These companies carried on business in the former Daily Telegraph Building, Sydney. His daughter was assisting him. SOLE DIRECTOR. Hewitt said he w.as the sole director of the British National Trust, the capital of which was £1,000,000. Farms and Farmlets Limited, which was registered in New Zealand, held shares. He believed the original shares were taken up by J. W. S. McArthur, C. T. Alcorn and T. R. McArthur. Cheques were passed for payment for shares. No books were kept for the British National Trust beyond a minute book. This was entirely due to his own remissness, but records necessary to complete the books were in his room.

Hewitt said he was also attorney at Sydney for the Southern British National Trust. This company had been housed in the trust building at Sydney for more than two months but had not yet paid any rent, the lease being uncompleted. While acting as attorney he received many thousands of pounds from applicants for debentures. He also received some shares, and other securities.

Harold Charles Glasson, secretary of the Investment Executive Trust of New Zealand, the Southern British National Trust and Wynwood Investments, said the share capital of the first-named, company, which was registered at Auckland, amounted to £lOO,OOO, most of which was called up. Cheques were passed for shares, and the cheques wait back to the persons paying into the company. Mr. W. Monahan, K.C., who is assisting the Royal asked witness how many shares were issued and paid for otherwise than in cash. Glasson said they would run into thousands. He added that the capital invested in this company had been re-invested in about 200 different companies.

Replying to Mr. Monahan’s further questions, Glasson said the Southern British National Trust, registered at Sydney, carried on the same business as the Investment Executive Trust of New Zealand, with the same directorate and the same secretary. Not many shares in this company were paid for in actual cash; there was- merely an exchange of cheques. CHEQUES. The judge: What was the basis of this exchange of cheques? Glasson: These people were selling their services to the company—it was for services rendered. The judge: Is there any record of these services? Glasson; Only in the formation of the company and the gathering of statistics. Mr. Monahan: Statistics of what? Glasson: Of various companies throughout the world. Mr. Monahan: Who got these shares? Glasson: J. W. S. McArthur, Alcorn and several others. Mr. Monahan: What did you get for your services? Glasson: Five hundred 5s shares. Among the others was Glover-Clark, Auckland,

Charles Graham Alcorn was examined regarding the affairs of the Sterling Investments Company and Alcorn Trower and Company Ltd. John William Shaw McArthur, managing director of the Investment Executive Trust of New Zealand, also of the Southern British National Trust, said part of the debenture money of the Investment Executive Trust was invested in debentures of the British National Trust.

The . judge: Why invest debenture money from Company A in Company B? McArthur: To make money out of it for the original debenture holders. They get the income from the investment. The judge: When did these series of companies start operations? McArthur: About three years ago.

The hearing was adjourned. Power to investigate the affairs of any companies registered in the Federal capital territory, the operations of which the Attorney-General may consider injurious to the interests of the general public, has been given by an ordinance published in a special Gazette. The ordinance covers the same ground as the Bill passed in the New South Wales Parliament and in the New Zealand Parliament.

A Sydney message states that the companies mentioned in the schedule of the terms of reference to the New South Wales Royal Commission are: Investment Executive Trust of New Zealand Ltd., Sterling Investments Company (New Zealand) Ltd., Investments Securities Associations Ltd., British National Investment Trust Ltd., New Zealand Shareholders Trust Ltd., Wynwood Investments Ltd., Pacific Exploration Co. Ltd., Farms and Farmlets Ltd., First Mortgage Freehold Security Co. (New Zealand) Ltd., Transport Mutual General Insurance Co. Ltd., V. B. Mclnnes Co. (New Zealand) Ltd., Alcorn Trower Co. Ltd., Financial Publications Ltd., Southern British National Trust Ltd., British National Trust Ltd., V. B. Mclnnes Co. (Australia) Ltd., Mclnnes and Co. Ltd. Mr. B. S. B. Stevens, New South Wales Premier, said that the investigation disclosed strong grounds for the most exhaustive inquiry to protect the interest of investors and the general public.