WARD'S BANKRUPTCY

West Coast Times, Issue 10537, 22 July 1897, Page 2

WARD'S BANKRUPTCY

[Per United P-iiess Association.] Dunedin, July 21. Mr Ward's examination on the liqui. dators report was contiaued, the report being traversed at great length so. that it is impossible to give more than the barest outline of the most important portions. As to the increase, in the share capital steps were taken in case it was thought desirable to take over freezing works' a"pd~ run them as a proprietary institution. As. to the hypothecation of debentures they were lodged as collateral security and were regarded as though they did not exist till sold and the Association had tq pay interest, He gave no authority to have £20,000 proceeds credited to his account. The paid up shared and goodwill did appear in the balance sheet, the amount of goodwill being sot out on the other side. Regarding the omission ' of £10,553 due to Nelson Bros there were 7,753 carcases of mutton in the store at the date. Nelson undertook by each steamer to clear the works, failing thaji the balance of the meat to be paid for. He explained at length the arrangement in book-keeping by which the process'was carried out. As to the liquidators' model balance sheet it was the property of j tlje Association and therefore should no.t go into the stock account. As to the balance of interest due the Bank it was usual to show only the balance after deducting interest due to the Association, As to Connell's draft, Fisher told the Bank ife was to be held over until Ward returned! After his return he stated the draft was. not to go forward because the drawing was not agreed to, Witness pointed out that when the liquidator debited the interest etc, the profit and loss balance was the' same, the conclusion being that the amounts must have been provided for in the Association's balance sheet. He contended no commercial balance sheet would be set out in the way the liquidator had done. As to the amount due to Cooper that was a consignment of sheep dip not under arrangement with Oonnell, afterwards when the Association was in oredit the draft was lifted and the warrant returned. Witness explained with reforence

to the"release of the Barron guarantee that wheh|the freezing account came down to £5,000 it was to be released and produced a memo f rob the General Manager of the Colonial Bank. The transaction was purely a business one in accordance with the arrangement made and there was no favor in it. He explained the arrangement about the draft orf Cooper. Witness declared the statement that 174 drafts were discounted with no business to support any of them was contrary to fact. .Provision was made in the balance sheet for bad and doubtful debts and the item could be traced through the books. He was satisfied the liquidator was wrong in the conclusions as to profit and loss account as he had started on the wrong basis in the first year's account. Regarding the deficits upon the consignment of oats which the auditor under pressure of examination said ought to be debit to profit and loss it would be almost impossible to follow such a system in a business of the magnitude of the Association and numerous cash sales should have been taken into consideration in addition to consignments.* Mr Solomon had given a particular instance and the auditor had agreed whereas by his (Ward's) reasoning it -should have been the reverse. The liquidator estimated the deficiency on the estate at £48,000 — Ifc might be correct but could not be accepted as a fair indication of what the business was as a going concern. The same remark applied to the value of stocks which had been greatly written down for liquidation. In all 1250 accounts out of 1750 had been paid in full and a number valued at 7s in the pound had realised 16s Bd. There were still a balance of 3000 accounts to be realised and they had paid £750 more than the valuation. He dealt with other classes of accounts showing equally good surpluses. The whole debentures, £40,000, had been paid off. Mr Cook said that was incorrect and he had not the money to do it. As to the losses stated in the report to be made by Ward and debited to the Association the statement was incorrect and he could show £6000 which had been debited to him and paid off. He admitted it was included in the £55,000 draft but nevertheless had been taken off the Association. Had he been j allowed a little longer he could have sold the Hokonui coal mine for £12,000. He understood it had realised 10a in the £. lie contended insufficiency of capital or improvident advances were not the causes bf the Association's downfall which was really due to incessant attacks made on it and its being loaded with £40,000 debt b,y taking over businesses at the instance q£ the Colonial Bank. They had paid the Colonial Bank £39,300 in interest alone. He had never spoken to the auditor in or any way interfered when auditing. Mr Solomon epitomised the charges brought against witness as to squarring accounts and concealing debts of the Association. Witness declined to give any answer that might be used against him. With reference to the transactions with

v r . — "_. "■ ■■ regard to taking ovor the business of the Boas twine factory at In vercargill he gave two cheques, one for £3000 odd and the other for £6482 for the purchase of stock €bld by his company. As co the first cheque Boss was practically in difficulties oaring to the pressure from the Colonial Bank and he (Ward) agreed to assist him by the formation of a twine company. In doing so he stipulated with Ross that flte stock purchased in the first instance Ijy himself as a private individual should Betaken ov«r by thejiew company plus Qte interest and all charges to date. If Mr Solomon's statement was correct that _» had to pay 33s 7d per ton for this twine it would be so. He denied absolutely he had this twine in hand for some Utttb. He had not the slightest doubt thtJ directors knew he was to receive a on this twine. The company was formed for a two-fold purpose — to re- . lieve the Ro3S account which was a congested one and to dispose of the stock of twine-. He held a second cheque for £6482- signed by Ross himself and Fisher, who was one of the directors and on its f^ce-the specific purpose was shewn — "Twine as per warrants." He now . learned some . of this twine had been bought by him from Ross at 38s per too. There was nothing hidden about the transaction for the purchase of twine since the specific purpose of the cheque was shown by being signed by the managet and one director. Tfae_examinatfon then closed.