COMPANIES INQUIRY

Wanganui Chronicle, Volume 77, Issue 209, 4 September 1934, Page 5

COMPANIES INQUIRY

PRODUCERS’ BANK UNEXPECTED WITNESS ’ CO-LIQUIDATOR’S EVIDENCE ° ALLEGATIONS DENIED e 2 ißy Telegraph—Press Association—Copyright) f Received Sept. 3, 9.5 p.m. s SYDNEY, Sept. 3. s There was a surprise turn in the pro--7 ccedings of the Royal Commission r when Robert Harold Cumming, coe liquidator of the Primary Producers’ Bank, tendered himself as a witness, j saying that he had travelled from Bris--1 bane for the purpose of making certain 1 denials. He denied that the liquidator had ever supplied lists of the bank’s depositors to the agents of the South British National Trust, but added that an employee had confessed that he had supplied information. “It was a very great surprise to me to read that any lists had ever been out of our hands; also, that individuals had been ■' acquainted with who were creditors and what amounts were due to them. Any lists or information supplied is a breach of our - employees’ agreement.” t Questioned by counsel for the co- ) liquidators, Cummings said that he had I frequently been asked for advice by 1 depositors and had always told them r that he knew little about the South r British National Trust, and that it ' would be best for them to make further inquiries before transferring their de5 posits. s Mr. Cumming said that he had been ' compelled to protest to the Southern s British concerning statements attributed to its agents. The statements had been a gross reflection on the liqui3 dators and he had written to the company pointing out that any suggestion of the Southern British taking over the bank’s assets was not only untrue, but seriously derogative to the liquidators. In reply it was explained that the men responsible for the statements had been dismissed. Such incidents would not recur. Cumming explained how on his arrival in Sydney he had been visited by a man named Long, an employee of the Brisbane office of liqui- ■ dators. The latter voluntarily con- , fossed that he had supplied lists to a ■ friend, the “whole thing done out of - good heartedness, Long being anxious i to help a man who had previously I worked in the bank, but who had lost ■ his job,” Cumming explained. i Cumming described overtures by Me- - Arthur and Mc.lnnes for the purchase ! of the bank’s assets. No figure had been mentioned, but finally at a conference it had been arranged that a public accountant should investigate the position at Mclnnes’ expense. McInnes had guaranteed to forfeit £5OO if any information was supplied to an outside source. The accountant had denied supplying information other than that concerning the purpose of his investigations, which were confined to the bank’s assets. Sa’.o of Shares. ' Mr. Monahan: How did you come to ■ get about £7OOO for shares worth ' £16,000? Does it appear honest? Alcorn: Quite honest. To the Commissioner, Alcorn said: ‘ “We sold them to the Southern British ‘ because we were bringing about an 1 amalgamation. It was for our mutual 1 benefit. No one else could have bought them on the market.” 1 Witness was questioned about the acquisition by Sterling Investments of : British National Trust debentures. He - said he adhered to the evidence he had ‘ previously given. The Commissioner: Do you know why r you were given a cheque for £50,000 on Hewitt? Who decided to buy the ■ British National Trust debentures? Alcorn: I discussed it with Howitt. I think I was told by Glasson we owed 1 the money. The Commissioner: Is it a fact that in this matter you had no personal disc’.ction? Alcorn: Yes. We were in the hands of the Trust. The Commissioner: You mean McArthur? Alcorn: Yes. The Commissioner; Y'ou did not know much about this transaction? Alcorn: Oh yes, Sterling Investments owed the British National Trust a I large sum of money for debentures they had delivered to either Sterling Investment or the Investment Executive i Trust. ‘ Mr. Monahan: Was it decided to buy out the people who invested in the Investmtent Executive Trust, and your company was made the tool to carry on tho transaction ? Alcorn: No. Most of the Investment Executive Trust debentures hail been bought on the New Zealand Stock Exchange. They were trying to discredit them, and Sterling Investments was to buy them at low market value. Mr. Monahan: Do you remember the case of Miss Smith, to whom £lO,OOO was paid? Alcorn: Y r es. The case was notorious. Mr. Monahan: On April 19 £20,000 worth of shares of Sterling Investments were held by the Securities Investments Association, that is by yourself. You transferred these shares to the British National Trust. Did you get anything for them? Alcorn: I am to get something. Tho Commissioner: Did you pay £20,000 for the shares? Alcorn: They were paid up to two shillings in the pound. Assisting With Ideas. Mr. Monahan: Why should you. and McArthur divide up in the Investment Executive Trust and the Southern British National Trust? Did you put n shilling in? Alcorn: I got a fifth share for assisting McArthur with his ideas. There is no other investment trust of this kind in the world. Mr. Monahan: The difference be-' tween the English trusts and this trust is that the English trusts’ debentures are backed by real capital, while ,your trust is backed by nothing. A letter was read from the accountant repeating the assurance that he had not revealed any information relating to the affairs of the bank. The Commissioner (to Cumming): There is no doubt in your mind that the giving away of information regarding the state of the accounts of depositors in the bank to anybody cutside the employ of the bank was a breach of trust? r Cumming: Yes.

Mr. Monahan: If you had suspected < Mclnnes had been guilty of conduct of ‘ that sort you would have cut him right off? Cumming: Certainly. Not Intentionally Misleading. C. G. Alcorn, recalled, told Mr. Monahan that the previous evidence he had given concerning the purchase by Alcorn, Trower and Company of shares , in the Investment Executive Trust was not intentionally misleading. His company had no cash at the time of the purchase, but there were debts owing , to it. He did not now stand by the statement that the shares were bought in the ordinary way from McArthur for cash. Dr. Louat: Tn fairness to Alcorn, I must point out that he said he had no personal recollection of the transaction. The Commissioner: Surely this is a transaction of which there should be some personal recollections. Alcorn: We had just been discussing transactions in share and debenture exchanges and I regarded this as quite different, and a cash transaction. The Commissioner: Yet this is far different from a cash transaction! Witness: Yes. But it was different from the other transactions. Dr. Louat informed the Commissioner that the balance-sheets for two of the lesser companies had been prepared, but the remainder could not be completed before Wednesday. Alcorn, further questioned by Mr. Monahan, said the shares in the Investment Executive Trust were valued at £1675. , r Mr. Monahan: You took the shares at first as security for a debt of £5OO. What did you think their vain was? Alcorn: I thought they were worth their par value. Mr. Monahan: How long did you have them? Alcorn: About six months. Alcorn said that McArthur had reminded him during the luncheon adjournment that he had paid witness by cheque. Mr. Monahan: Do you suggest the shares are still in Alcorn and Trower’s name? Alcorn: I think so. There was an arrangement between Alcorn and Trower and myself. Mr. Monahan: I take it you paid McArthur the difference between £5OO and the share value? No reply. Mr. Monahan: On these figures you made a profit of £llOO. Alcorn: Yes. Mr. Monahan: You say McArthur had given you a cheque for £5OO. Alcorn: It was paid into Investment Securities Association, Limited, a New Zealand company. Mr. Monahan: What did they want with these securities? Alcorn: That company is really myself. My sister and myself are the only shareholders in Alcorn, Trower and Company. Tn reply to further questions by Mr. Monahan, witness said he did not transfer all the shares from Alcorn and Trower to himself. He left 500. It was not intended to sell them to anybody outside. They were sold subsequently to the Southern British National Trust. Mr. Monahan: How soon afterwards? More or less at the same time? Alcorn: Yes. Mr. Monahan: At the same instant that you bought them? You sold them to the Southern British for £7000? Alcorn: Yes. When asked why, according to the books produced in Court, £90.000 which was owing to the British National Trust at the time of the August transfer was not shown in the July bal-ance-sheet as a liability, Alcorn said that the balance-sheet was prepared by Hewitt and Glasson, and he signed it assuming it to be correct. Mr. Monahan: But was it not hopelessly incorrect to the tune of £50,000? Alcorn: It wou’d appear so, although I understood that it was perfectly correct at that time. The Commissioner: Do you really understand books? Alcorn: No. While being questioned about Farms and Farmlets Limited, Alcorn said Ijfiat certain parties in New Zealand started a public investor’s journal, and dug up things which they twisted about in a way detrimental to the interest of the trust. The Commissioner: What have you to fear if everything is in order? Alcorn: The matter was misconstrued .by interested parties. Alcorn was then examined about the purchase of the former Daily Telegraph building in King Street, Sydney. He said that McArthur and himself had ( specially benefited by the enhanced value of that building. The Commissioner: How much did you get? Alcorn: A fifth of what McArthur received. I think between us we got £105,000. The hearing was adjourned till tomorrow. <