MAY DO GOOD

Taranaki Daily News, 13 September 1934, Page 5

MAY DO GOOD

COMPANIES COMMISSION ABUSES OF LAW AT PRESENT SINGLE MAN AS COMPANIES COMMISSIONER’S REMARKS COUNSEL TO MAKE CHARGES By Telegraph—Press Assn.—Copyright. Rec. 7.50 p.m. Sydney, Sept. 12. “It is one of the abuses of the company law at present, I think, that a single individual can call himself A company or B company or C company, and so avoid risking a great part of his assets in any speculation or trade,” said the Commissioner, Mr. Justice Haise-Rogers, at the conclusion of to-day’s sitting of the Companies’ Commission. “If anybody can suggest how legitimate companies can carry on without being hampered and at the same time how these companies which are so liable to lend themselves to abuse can be prevented from operating, I think the commission may do a very great amount of good.” The Commissioner added that, if Mr. W. W. Monahan, K.C., who is assisting the Commission, intended to make any charges in regard to the management of any of the companies or in regard to the conduct of individuals in the course of his address at the conclusion of the Commission’s sittings, it would be fair for him to formulate them beforehand so that counsel interested could address themselves to such charges. Mr. Monahan said he had fairly and plainly indicated them in his examination, but he would do as the Commissioner had suggested. He proposed to proceed with McArthur’s examination on Monday. The Commission adjourned until Monday. When the Commission resumed, W. C. B. Hewitt, solicitor to several of the companies, was questioned regarding difference in the Sterling and British National Trust balance-sheets. Hewit said that an unintentional mistake had been made in their preparation. STATEMENT HOPELESSLY WRONG. The Commissioner: As a matter of fact the balance-sheet is hopelessly wrong?— Yes. Hewitt set out to explain how the Sterling Company’s, assets in the British National Trust had increased from £90,000 to £120,000 and . produced a number of documents. Mr. Monahan (after inspecting one of the papers): This has all been worked out in the last few days?—Yes. Mr. Monahan: When was this transfer signed?—This morning. The Commissioner: These papers are dated yesterday yet the entries were made in the balance-sheet as at June 30?—It had all been arranged but was not signed. Mr. Monahan: Is this not the result of Glasson’s evidence yesterday?—No. After Hewitt had been questioned regarding the balance-sheets, the Commissioner remarked: “I am instructed to investigate the companies’ activities and I want to know whether the finances were in a chaotic condition right up to the appointment of the Commission. The inference one may draw at present—and McArthur does not throw any light upon it—is that whatever may be the state of the-investment register all of the involved transactions of the various companies are simply done at McArthur’s direction and for his own purpose.” Hewitt: I do not think so.

C. G. Alcorn recalled was examined regarding a transaction between the Investment Executive Trust and the Transport Mutual and General Insurance Company (its subsidiary) and the Trustees and Executors’ Agency Company. Witness said the object was for the Transport Mutual to act for the Investment Executive Trust and to gain a substantial interest in the Trustees and Executors’ Agency Company. The Commissioner: You can leave out the Transport Mutual. It is only a dummy.

SECURING CONTROL OF AGENCY.

Replying to further questions Alcorn said McArthur was to control the whole thing, but his name was not to appear as coming into the business. There was no secret, however, that the Investment Executive Trust owned all the shares in the Transport Mutual. Travellers were supplied with cash and sent to New Zealand with instructions to buy Trustees and Executors’ Agency shares as cheaply as possible, but to buy them. Shares on the New Zealand stock ex-

change were at £3 ss, and those obtained by the Investment Executive Trust • cost on the average £3 12s 6d. Replying to Mr. Monahan, witness said they had acquired about 45 per cent, of the shares which he thought gave them control of the company. He agreed with McArthur that the present directors, who, he said, were more than 80 years of age, were not enterprising enough and should be replaced. Mr. Monahan then intimated that he could carry the matter no further until the balance-sheets had been completed. OBJECTS OF COMMISSION. After further discussion the Commissioner said the Commission was primarily concerned with ascertaining whether the public was properly secured for the money it had subscribed. A second point was whether the companies had been improperly used for the purpose of personal gain by any persons connected with them, and, if it appeared that those companies were being properly used, a third was to trace where the money had gone and in doing so a great number of difficulties arose.

“In regard to the two main compan-. ies,” the Commissioner remarked, “everything must be done to preserve their assets. As to some of the others it might be a good thing if they were not continued. They have been turning themselves into all sorts of different companies and putting so many cloaks over themselves, so to speak.”