TRUSTS’ AFFAIRS

Wanganui Chronicle, Volume 77, Issue 221, 18 September 1934, Page 5

TRUSTS’ AFFAIRS

- DEALINGS CRITICISED FUTURE OF COMPANIES , SHOULD THEY BE WOUND UP? it d d ” DIRECTORS WHO RESIGNED a 1 r (By Telegraph—Press Association —Copyright) )- Received Sept. 17, 9.10 p.m. i- SYDNEY, Sept. 17. r, The Royal Commission which is ins quiring into the activities of 31 coin's panies continued its investigations tod day. s Mr. Justice Haise Rogers presided, as Commissioner, Mr. W. W. Monae han, K.C., and Mr. J. B. Collier apo peared as counsel assisting the commiss sion, Mr. R. Windeyer, K.C., and Mr. B. Fuller for the Investment Executive d Trust of New Zealand, Limited, and the Southern British National Trust, Limited, and Dr. F. Louat for three other companies. William Andrew Pilkington, chairman of directors of the Investment Executive Trust and the Southern British National Trust, was asked to explain his reasons for coming to Syda ing to Sydney from New Zealand. He said that from Press reports and from propaganda distributed by a group of hostile companies known as c the “Kelly Gang,” he thought it his x business to join his business associates, whom he regarded as brilliant men of f absolute integrity. c Mr. Monahan: Did you not come here to sign some documents? Pilkington: No. t Mr. Monahan: Do you know that McArthur used certain funds of the Tnc vestment Executive Trust to enrich himself? Messrs. Fuller and Louat objected to this question. The Commissioner (to Pilkington): You know that McArthur borrowed £5(1,000 from the Investment Executive. Trust without security? Pilkington: The building was the. security. Mr. Monahan: Do you think that the Investment Executive Trust should have its trust funds invested in trust buildings? t Pilkington: Yes. 1 The Commissioner: We have had sev- • eral members of these associations here, - and one and all have admitted that 2 they exercise no independent discretion 1 whatever. Are you in the same cate- ’ gory ? 1 Pilkington: No. T exercise my own r discretion. The Commissioner: Have you ever J opposed any of McArthur’s schemes? J Pilkington: I have never had occat sion to. Right to Moneys. , After Pilkington kad been further t questioned concerning the purchase of the trust building, the Commissioner i directed Mr. Louat’s attention to the , dates of the purchase transaction. He said that one of his duties was to re- . commend whether any of the companies ’ should be wound up. If it appeared , that McArthur and Alcorn had in law no right to these moneys, that would be a very strong reason that all the profits should be diverted to the deben- , ture holders. If deposit money was paid out without fcuv security at the time it was paid, it should be a matter for serious consideration of what the ultimate effects’ were. Pilkington was questioned regarding the principles of the Investment Executive Trust. The Commissioner- As T understand the scheme, there are very few shareholders in your companies. Most of the capital is held by two men? Pilkington: Yes. The Commissioner: So the debenture holders have no say whatever in the control in the company? Pilkington: No. The Commissioner: Practically all these investments of your companies and the shareholdings are entirely in the control of one man. Pilkington: Yes. The Commissioner: You have debenture capital amounting to £400,000, and as far as we know the real capital is subscribed by the shareholders. It is . practically one man who is inviting the : public to place capital unreservedly at ] liis disposal? Pilkington: No, he is subject to the directors. The Commissioner: Let us face the facts. If you opposed McArthur tomorrow on a matter of principle, I suppose you would go out? Pilkington: Of course, if he wanted - me to. Replying to Mr. Monahan, Pilking- 1 ton said that his co-directors in the In- ; vestment Executive Trust had been Pollard and McArthur. He had heard a rumour that Pollard had resigned. At the last meeting of directors, at which ‘ Pollard was present, a proposal had ' been put forward to give McArthur power of attorney, but Pollard had ' taken the view that since the Commission had begun its sittings it would be dangerous to transact business of that I nature. 1 Further questioned, witness admitted that thepporerw r er of attorney had been I prepared so that McArthur could per- ' form in New South Wales any acts of a director. £ Mr. Monahan: Pollard was not pre- c pared to sign it, so you came over to New South Wales? Pilkington: J had arranged to come ' over before that. Mr. Monahan: Did Hope, a former director, retire because the operations 1 of the company were not to his liking? c Pilkington: No, because they were too big for him. It had nothing to do 1 with a balance-sheet, Mr. Monahan, he retired at the same time as the auditor, c Mr. Anderson, got out. b d Division of Opinion. A j Pilkington was further questioned regarding the Investment Executive Trust balance-sheet, to which Ander- / son had taken exception. He said there f. had been a division of opinion as to the line of demarcation between brokerage charges and commission charges. „ Only five per cent, had been stipulated, 0 but Mclnnes and Co. had received considerably more. Mr. Monahan: Did you show Pollard 0 a report sent by Anderson to the f] board? f< Pilkington: Yes. Mr. Monahan: I put it to you that f. Pollard was never told of lhe dispute with Anderson? n Pilkington: I don’t know. Mr. Monahan: Anderson was invited