GOVERNMENT’S VIEWS

Taranaki Daily News, 27 November 1934, Page 9

GOVERNMENT’S VIEWS

TRUST COMPANIES PLAN STATEMENT BY PRIME MINISTER. REASON FOR SENDING A CABLE. ■PROTECTION FOR INVESTORS. By Telegraph—Press Association. Wellington, Last Night. The allegation bj Mr. Norman Levy that the cable sent by the Prime Minister to the Sydney Companies Commission was a deliberate attack on the debenture-holders committee was brought before Mr. G. W. Forbes to-day. Mr. Forbes said that on November 21, when a Press message was published relative to Mr. L. W. Swan’s scheme for the re-construction of the trust companies, he cabled the Premier of New South Wales as follows:— “Trust Companies inquiry. New Zealand Government does not recognise Swan's scheme as representing wishes of New Zealand debenture-holders. Understand scheme to have been originated by a committee set up as result of postal canvas by Levy and Madden after former’s visit to Sydney for consultation at request of McArthur. My Government strongly of opinion no steps should be taken based on alleged views of de-benture-holders till an authoritative and disinterested statement of facts been communicated to them and proper steps taken to ensure a well-informed and uninfluenced decision by them.” Mr. Forbes said the New Zealand Government was concerned in the matter on two points only. In the first place it was strongly of opinion that debentureholders should not be asked to commit themselves in any way until the whole of the relevant facts had been fairly and accurately placed before them. SUPERVISION OF VOTING. In the second place the Government felt that, when debenture-holders were asked to express their opinion, the voting should be taken and supervised by a disinterested authority. Mr. Forbes also said he was at a loss to understand why the alleged representatives of New Zealand debentureholders should approach a Royal commission sitting at Sydney. The Investment Executive Trust Ltd. was before the tribunal only as a foreign company transacting a very small portion of its business in New South Wales. . The Investment Executive Trust was incorporated under the New Zealaijjl Companies Act. Inspectors were inquiring into its accounts and transactions and those of 12 related companies and were expected to report soon to the Supreme Court in New Zealand. The affairs of these companies and their debenture-holders and other creditors would be settled according to New Zealand law and the New Zealand Companies Act, provided that the Court might give directions for calling meetings of debenture-holders or otherwise obtaining their views. Mr. Levy informed the Press Association to-day that in company with Mr. Swan he met Mr.' Richmond on the Middlemore golf course, which was the first occasion on which he made the latter’s personal acquaintance. He was not introduced to Mr. Swan by Mr. Richmond. EXAMINATION OF MR. SWAM. A Sydney cable states the official report of Friday’s proceedings at the Companies Commission during the examination of the witness, Leonard Wesley Swan, an accountant, contains the following passages:— Mr. Pitt, K.C.: How long had you known Mr. Levy. Mr. Swan: I had not known him prior to this. I think Mr. Richmond mentioned my name to him. A later section of the report states:— The Commissioner (Mr. Justice Haise Rogers): You heard that cable Mr. Monahan (who is assisting the commission) handed to me? That this scheme was propounded by Mr. Levy after a visit to Sydney and consultation with McArthur? Is that correct as far as you know? Mr. Swan: Mr. Levy made his position perfectly clear. The Commissioner: Is it correct that the scheme was propounded by Mr. Levy after a vist to Sydney and consultation with McArthur?—Can I answer yzhat he told me? As far as your knowledge goes.—As far as I know what he said was quite correct. Mr. Monahan: Is there anything further you wish to gay? .Mr. Swan: Mr. Levy made it perfectly clear to Mr. Richmond and myself that when the commission was appointed he came to Sydney. The first step he took was, I think, to send a cable to McArthur expressing his personal confidence. As result of that he came to Sydney at his personal expense. He came back to New Zealand quite convinced in his own mind that as far as the Investment Executive Trust debentures were concerned there was 20s in £1 value to them with proper handling. There has not been any doubt whatever as to his actions. RETURN OF MR. SWAN REPORTS CALLED INACCURATE. VALUABLE RESULTS POSSIBLE. By Telegraph—Press Association. Auckland, Last Night. Mr. L. W. Swan returned to Auckland to-night. Having read the report cabled to-day from Sydney, he said it was correct as far as it went but differed considerably from Saturday’s report. “I now find,” said Mr. Swan, “that my assumption that Mr. Richmond had mentioned my name to Mr. Levy was incorrect. This was due to the fact that Mr. Levy on calling at my office at once mentioned Mr. Richmond’s name. To-day's report also corrects the statement in the Press Association report on Saturday which made it appear that a cable was sent to McArthur in connection with my visit, whereas in fact no communication passed between any member of the debenture-holders’ committee and McArthur after the committee was formed until I saw him at Sydney accompanied by various counsel.” Saturday’s Press Association report also reported Mr. Swan as saying he was returning to New Zealand convinced that so far as the Investment Executive Trust Ltd. was concerned 20s in the £1 were available. “This is incorrect,” said Mr. Swan. “What is here attributed to me is what I told the commission Mr. Levy had stated to the debenture-holders in New Zealand after his visit to Sydney in August.” The report of the Press Association published on Saturday also said:— ■ “The commissioner, to Mr. Swan: What, in fact, did you put to the debentureholders?—Mr. Swan: Nothing, sir.” “What actually happened,” said Mr. Swan, “was that I handed in copies of all the circulars which had been sent out on the instructions of the committee. These dealt entirely with the formation

of the committee and contained neither criticism of the work of the commission nor proposals for dealing with the debenture-holders’ interests.

“To sum up the results of my visit,” he continued, “I am satisfied that consideration given to the proposals in the interests of debenture-holders will have important practical results in Australia, and, if followed also in New Zealand, will be of even more value owing to the fact that investments held by the Investment Executive Trust, apart altogether from its interest in the trust building, are much more diversified and valuable. It was assumed by the commission that New Zealand debentureholders were in a much better position than those in Australia. “Interests of Australian and New Zealand debenture-holders are so inter mingled that it would seem unthinkabl that full consideration could be given either by Australian or Nev? Zealand tribunals to these interests without reference to the proposals and wishes of the whole body of debenture-holders,”