WARD BANKRUPTCY

West Coast Times, Issue 10534, 19 July 1897, Page 4

WARD BANKRUPTCY

[Per United Press Association.] Dunedix, July 17. As Mr Ward ivjs not ready to go on with explanation re t'tult, Mr J. C. IT.iunah, late auditor to the Association, was called. He had been auditor fifteen years. He slated nptice was given that £21,000 had been paid in the day before the balance in 18"4, and drawn out afterwards, ibut it did not strike him as suspicious. Nor again iv 1395, he thinking Mr Ward a rich man. It now appeared as if it was done to deceive the shareholders. If he had known what he did now he would not have passed the entries, and would have informed the shareholders. It was understood £30,000 was a payment by Ward. His Honor said if Mr Hannah was informed this was paid in by Ward surely he was right in passing the balance sheets and accepting the explanation.

Mr Ward's account was credited with I £44,000. Before he audited the books 1 the entries were reversed and he was in- < formed by someone in the office the ! entries were made in error by the ledger ( clerk. It uever occurred to him the < entries might have been made to show i the acting-Chairman that Ward's account was better than was really the case. He could say no more than he accepted the officers' explanation as satisfactory. The concern seemed a paying one and he was satisfied everything was all right. Examined as io the produce and stock account he defended the entries and considered it quite legitimate to credit th c stock account with interest ■on produce accouct, as stock would have increased to that amount in value. He accepted the officers' statemmt about Brook's and Connell's accounts, which were grain accounts, and looked upon as one. Knowing what he did now he coi:M not pass these items. If he had kuo.vu the facts he would have added £54,000 to the liabilities. The grain ac" count due to Oolbeck was not shown in the balance sheet. Pressed as to the reason, witness said Fisher told him the account was a special arrangement with the Bank. He could not tell when he passed such a balance sheet as time of 1895. Pressed upon this matter he said he ought to have been shown from the present point of view. Whoever was responsible for it had deliberately misled the shareholders and wilfully concealed the state of affairs afterwards. He said it might not be wilful but there was no doubt the affairs of the company were concealed. All be had was the secretary's statement but could see now he ought to have had vouchers. He would rather not answer as to whether the actions could be justified but finally stated there was no excuse. Mr Hannah, the Auditor's examination was gone one with. He had large experience as an auditor. He first audited the Association's books in June 1893. He noticed in the course of the andit that on the day of the balance sheet in 1893 £21,000 was paid into Ward's account and was taken out the next day. The same thing happened in 1894 and 95. He did not think it strange as he considered Ward a rich man, and the official explanation appeared satisfactory. Now he would look upon the transaction as suspicious. In 1895 £54,400 odd was paid into Ward's account at balancing time, but Fisher's explanation disarmed suspicion. He considered £30,000 draft 1896 Brooks, and Connell's £6500, were bonafide payments by Ward and legitimate. After being examined re the £30,000 draft he said if he had been fully informed he probubly would not have passed the item. The entries of £44,000 in January 1895 were reversed before he audited the books and he was informed that the entries were a clerical error. The entries were reversed on balancing day, foui or five months afterwards. It was not his duty to satisfy himself that the stock was actually in the warehouse. Examined at some length as to the purchase of stock at Bluff store accounts he defended the entries as proper. Fisher or Anderson told him that in June', 1895, Ward forwent his salary and rents up to £1500. On the whole it would have been better to have disclosed in the balance sheet that £1500 of profit was a present from Mr Ward. He must say now he thought the shareholders were misled. Ward's indebtedness was increased on paper by £1,500 and divided amongst the shareholders. The sum of £1,500 was placed to the credit of the goods account to swell the profit of merchandise sold . He accepted Fisher's statements. The statements concerning the 1895 balance sheets were accepted by him in good faith. Had he known what he did know now he would not have passed the balance sheet and would have had to increase the liability side of the balance sheet £54,000. Regarding the special grain account with the Bank, omitted from the balance sheets, he could not remember why it was done but thought it was because Fisher told him it was a separate account and a special arrangement. A promissory note given to Carswell for £10,000 i was omitted because there was a dispute as to the quality and quantity of the goods. In the 1895 balance sheet in reality £74,000 was omitted from the liability side of the balance sheet' and also items f romjthe credit side. He would not sign that balance sheet now. In the balance sheet £47,000 debits due to the Association was partly made up. Being pressed witness refused to say whether or not the practices adopted in drawing up the 1895 balance sheet were justifiable but admitted that the state of the Company's affairs had been thereby concealed. He accepted the secretary's statements as to the amount of advances and securities. He accepted the stock sheets and managers' statement as to stocks in hand and afloat. He admitted that although the stock was valued at £17,000, there was £10,000 more stock which was CarswelFs aud which was omitted from the balance sheet. Witness again, after great pressure, admitted there was no excuse for the mode of drawing up the 1895 balance sheet. The Court then adjourned,