LOAN AND MERCANTILE AGENCY COMPANY.

Star (Christchurch), Issue 4945, 8 May 1894, Page 3

LOAN AND MERCANTILE AGENCY COMPANY.

Justice Williams's Decision. [Special to Pbxss Association.! LONDON, May 7. Justice Williams, in his decision concerning the New Zealand Loan and Mercantile Agency Company, states that, despite the evidence of the Eight Hon A. J. Mundella, he thought the statements of the other directors correct that counsel's opinion with regard tc the alteration in the prospectvises in 1879 had been submitted to the Board, and that counsel's opinion had been based on the case prepared by Mr Thomas Russell. Justice Williams considers that Mr Falconer Larkworthy had been a valuable and trustworthy servant, and that if he had been allowed control, and not forced to leave, tbe company would probably still have been in a solvent position.. The later balancesheet was positively misleading. It was evident that the directors had not doubted Mr Larkwortby's report, which the Judge held had placed the directors in full possession of the condition of tne Company's properties, but the directors had not disclosed the information to the shareholders. It was apparent, he thought, that Mr T. Eussell had acquiesced with Mr Elder, the Australian manager, and Mr Paul, the London manager, in the telegram suppressing Mr Elder's report on the Australian properties. There appeared to him no satisfactory reason why the Directors should not have informed the debenture-holders earlier of their insecure position. The Directors, too, ought to have noticed the irregularity of placing the investment In Land Company shares under the heading of wool and produce. The auditors had failed in their plainest duty, and they ought not to have signed the balance-sheet of 1892 until a substantial amount had been written off. Justice Williams said that he considered the advance to the Land Company was to save the Land Company and Mr Thomas Eussell from liquidation. Justice Williams stated that apparently the system of suppression adopted in London was for the object of throwing a strong light upon the officers' estimate of the Directors. The Standard, referring to the commercial morality of the officers, states they received no benefit from the transactions, or the withholding of the reports. It considers that the investment in Waikato lands was bad and in favour of Mr Thomas Eussell, and that it protected the Loan Company's Directors interested.