Company Commission

Waikato Times, Volume 116, Issue 19352, 4 September 1934, Page 5

Company Commission

MR ALCORN RECALLED. A RETRACTION. TRANSACTIONS IN SHARES. dealings in debentures. DOES NOT UNDERSTAND BOOKS United Press Assn.—Elec. Tel. Copyright. SYDNEY, Sept. 3. At the company inquiry before the Royal Commission to-day, Mr. >C. G. Alcorn, recalled, told Mr. Monahan that previous evidence he had given concerning the purchase by Alcorn, Trower and Company, Limited, of shares in the Investment Executive Trust of New Zealand, Limited, was not Intentionally misleading. His company had no cash at the time of the purchase, but there were debts owing to it. Witness said he did not now stand by the statement that the shares were bought In the ordinary way from Mr. MoArthur for oash.

Dr. Louat: In fairness to Mr. Aloorn I must point out that he said he had no personal recolleotlon of the transaction. —The Commissioner: Surely this Is a transaction of which there should be some personal recollections?

Mr. 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?— Yes. But it was different from other transactions. Dealings In Shares. 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. Mr. Alcorn, in reply to further questions by Mr. Monahan, said that the shares in the Investment Executive Trust were valued at £1675. Mr. Monahan: You took the shares at first as security for a debt of £SOO. What did you think their value was? —Mr. Alcorn: I thought they were worth par value. How long did you have them? .—About six months. Mr. Alcorn said that Mr. McArthur had reminded him during the luncheon adjournment that he had paid witness by cheque. Mr. Monahan: Do you suggest that the shares are still in the name of Alcorn, Trower and Company?—Mr. Alcorn: I think so. There was an arrangement between Alcorn, Trower and Company and myself.

■Mr. Monahan: I take It that you paid Mr. McArthur the difference between the £SOO and the share value? —Mr. Alcorn made no reply. On these figures you made a profit of £lloo?—Yes.

You say Mr. McArthur had given vou a cheque for £SOO? —It was paid into the Investment Securities Association, Limited, a New Zealand company. What did they want with these securities? —That company is really myself. My sister and I are the only shareholders in Alcorn, Trower and Company. l:i reply to further questions by Mr. Monahan, witness said he did not transfer all the shares from Alcorn, Trower and Company 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? —Mr. Alcorn: Yes. At the same instant that you bought them? You sold them to the Southern British for £7000? Yes.

Quite Honest.

’ How did you come to get about £7OOO for shares worth £1675? Does It appear honest? —Quite honest. In reply to the commissioner, Mr. Alcorn said: We sold the shares to the Southern British because we were bringing about an amalgamation. It was for our mutual benefit. No one else could have bought them on the market. Witness was questioned about the acquisition by the Sterling Investments Company of New Zealand, Limited, of British National Investment Trust debentures. He said he adhered to the evidence he had previously given. The Commissioner: Do you know why you were given a cheque for £50,000 on Mr Dewitt? Who decided to buy British National Trust debentures? Mr Alcorn: I discussed it. with Mr Hewitt. I think 1 was told by Mr Glasson we owed the money.

Is if a fact that in this matter you had no personal discretion? —Yes. Wo were in the hands of Mie trust. You mean Mr McArthur? —Yes.

You did not know much about this transaction? —Oh, yes. Sterling Investments owed 111 c British National Trust a large sum of money for debentures they tiad delivered to either Sterling Investments or the Investment Excutivc Trust.

Mr Monahan: Was it decided to buy out the people who had invested in the Investment Executive Trust, and your company was mado the tool to carry on the transaction? —Mr Alcorn: No. Most of the Investment Executive Trust debentures had been bought on a New Zealand Stock Exchange. They were trying to discredit them and Sterling Investments was to buy them at a low market value. Do you remember the case of Miss Smith to whom £IO,OOO was paid?— Yes. The case was notorious.

On April 10 £20,000 worth of shares of Sterling li Vestments were held by the Securities Investments Association, that, is, by yourself. You transferred these shares In the British National Trust. Did you get anything for them?—l am to get something. No Other In the World. The Commissioner: Did you pay £20,000 for the shares?—Mr Alcorn: They were paid up to two shillings in the pound. Mr Monahan: Why should you and Mr McArthur divide up In tho Investment Exocutlvo Trust and the Southern British National Trust? Did you put ono shilling

In? —Mr Aloorn: I got a fifth share for assisting Mr MoArthur with Ideas. There Is no other Investment trust of this kind In the world. Mr Monahan: The difference between English trusts and this trust is that English trusts’ debentures are backed by real capital, while your trust was backed by nothing. When Mr Alcorn was 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 balance-sheet as a liability, witness said the balance-sheet was prepared by Mr Hewitt and Mr Glasson, and he had signed it assuming it to be correct. Mr Monahan: But was it not hopelessly incorrect to the tune of £50,000? Mr Alcorn: It would appear so, although I understood it to be perfectly correct at that time.

The Commissioner: Do you really understand tho books?— Mr Alcorn: No. While being questioned about Farms and Farmlets, Limited, Mr Alcorn said certain parties In New 1 Zealand had started a Public Investors’ journal and dug up things which had been twisted about in a way detrimental to the interest of the trust. The Commissioner: What have you to fear if everything is in order?—Mr Alcorn: The matter was misconstrued by interested parties. Mr Alcorn was then examined about the purchase of the former Daily Telegraph building in . King Street, Sydney. He said that Mr McArthur and himself had specially benefited by the enhanced value of that building. The Commissioner: How much did v OU get?—Mr Alcorn: Onc-llfth of what -Mr McArthur received. I think between us we got £105,000. At this stage Hie silling was adjourned until to-morrow. A WOMAN'S SHARES. ban on dealing. AN INJUNCTION ISSUED. SYDNEY, Sept, ;i. In the Equity Court, Sydney, 10-day Mrs Maud N'ott, of Neutral Bay, applied for an injunction against the Southern British National Trust, Limited, to restrain it from transferring, or otherwise dealing with, cerlain shares and Commonwealth bonds now in the possession of the company. Dr. F. Louat, for the company, denied that any misrepresentations had been made by the company or its agents in the course of dealing with Mrs Noth Counsel added that Ihc public would discover very shortly that the whole of the debenture-holders were fully covered by securities and there was no cause for anxiety by plainliff. An injunction, by consent, was granted until the hearing of the suit.