TRUST COMPANIES

Wairarapa Daily Times, 18 September 1934, Page 5

TRUST COMPANIES

SYDNEY ENQUIRY FURTHER EVIDENCE. Press Association Electric Telegraph— CoDyright SYDNEY, Monday. The Royal Commission which is enquiring into the operations of a group of trust and other companies resumed its sittings this morning, Mr Justice Halse Rogers presiding. 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 Sydney from New Zealand. He said that from Press reports and from propaganda distributed by a group of hostile companies known as "The Kelly Gang,” he thought it his business to join his business associates, Avkom he regarded as brilliant men of absolute integrity. Mr Monahan (who is assisting the commissioner): Did you not come here to sign some documents? Pilkington: No. Mr Monahan: Do you know that McArthur used certain funds of the Investment Executive Trust to enrich himself? Mr Fuller and Dr. Loust. counsel for the companies, objected to this question.

The Commissioner (to Pilkington): You know that McArthur borrowed £50,000 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 the Trust Building? Pilkington: Yes. After Pilkington had been further questioned concerning the purchase of the Trust Building the commissioner directed Dr. Louat’s attention to the dates of the purchase transaction. He said one of his duties was to recommend 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 profits should be diverted to tho debenture-holders. If deposit money was paid out without any security at the time it was paid it should be a matter for serious consideration what the ultimate effects were.

Pilkington was questioned regarding the principles of the Investment Executive Trust.

The Commissioner: As I understand the scheme there are very few shareholders in your companies. Most of the share capital is held by two men. Pilkington: Yes. The Commissioner: So the debentureholders have no say whatever in the control of the company? Pilkington: No. The Commissioner: Practically these investments of your companies and the shareholders 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 subscribed by shareholders is practically negligible. Pilkington: Yes. The Commissioner: So that it is practically one man who is inviting the public to place capital unreservedly at his disposal? Pilkington: No, he is subject to 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.

McArthur, recalled, produced the pass-books on his bank accounts. Mr Monahan (referring to one of these): What is this cheque paid in for £IOOOI

McArthur: That, was an advance made to me from either the Southern British National Trust or the British National Trust, I can’t remember which.

Mr Monahan: Was it not the balance of the mortgage advanced by the Australian Glass Company? McArthur: If it is I paid £SOO procurator’s fee and repaid the other £SOO to the British National Trust. I was under the impression I had repaid it, though I can see no record of it in any of these statements. Mr Monahan: I suggest you employed that for your personal uses, but we will go into that later. Continuing, Mr Monahan asked: You and Alcorn have made profits on paper of £340,000, have you not?

McArthur: No. Mr Monahan: There was one for £287,000'? McArthur: Yes.

- Mr Monahan: And one for £77,000 in connection with sales of Southern British ?

McArthur: That did not affect our position at all. It does not mean there was any profits made. The share capital was increased. Mr Monahan: But that was only done after this commission started. You appeared in the Southern British National Trust books as a creditor. McArthur: Yes. Mr Monahan then questioned _ McArthur regarding the exchange of certain cheques. The Commissioner: I may take it that all this was done because you did not wish the facts to be disclosed to anyone. McArthur: Not to the banks. The Commissioner: Is not this series of transactions a cloak over the fact that you have certain holdings obtained in this way? McArthur: We did it to keep the true facts from our opponents. The commission adjourned till tomorrow.