Company Transactions

Waikato Times, Volume 116, Issue 19353, 5 September 1934, Page 8

Company Transactions

COMMISSION IN SYDNEY. FURTHER REVELATIONS. MR ALCORN STILL IN BOX. United Press Assn.—Elec. Tel. Copyright. SYDNEY, Sept. 4. The Royal Commission which is inquiring into the activities of 17 trust companies continued its investigations to-day. Mr Justice liaise Rogers presided as Commissioner, Mr W. W. Monahan, K.C., and Mr J. B. Collier appeared as counsel assisting the Commission, Mr R. Windeyer, K.C., and Mr B. Fuller for the Investment Executive Trust of New Zealand, Limited, and the Southern British National Tiust, Limited, and Dr. F. Louat for three other companies. The examination of Mr C. G. Alcorn was continued. Replying to Mr. Monahan Mr. Alcorn said he had had no income for income-tax purposes for four or five years. The Commissioner: You got £485 for your services to the Investment Executive Trust?—Mr. Alcorn: Yes. Is that income? —Yes. I forgot that. Mr. Monahan: You got £45 or more for introducing Mr. McArthur to Mr. Mclnnes?—Mr. Alcorn: Yes. Witness said he really had been living on his oapltal. The British National Investment Trust began as the Stock Exchange Corporation of New Zealand, Limited. It consisted of licensed sharebrokers who were not in the Stock Exchange, which opposed them. Witness said he had 250 two shilling shares. He was not sure whether he or the trust paid for them. Mr. Monahan: The Investment Securities Association took over 9000 of the shares? —Mr. Alcorn: Yes. That is, myself. Who paid for them?—l do not know. At a meeting in February, 1933, additional shares were allotted to Mr. McArthur and yourself. You were allotted 44,598 shares. What had you done to deserve that? —The Commissioner: He applied for them on condition that he paid for them. Mr. Monahan: What was the value of these shares at the time? —Mr. Alcorn: Par value. Did you, as acting-chairman of directors, regard yoifrself as having a duty to see that the company’s property was not sold for less than its real value?—Yes. What did you pay for the shares?— Par value. The Commissioner: How did you pay?—Mr. Alcorn: We borrowed from the Investment Executive Trust. Mr. Monahan: You took trust moneys and used them for speculation for private gain?—Mr. Alcorn: No. A loan was raised for £50,000 with the Investment Executive Trust. You used trust moneys for private speculation? —It was in accordance with the terms under which we got the money.

The Commissioner: Is there any record that, before the commission began, one penny of profit you made as a private speculator was to go anywhere but into your own pocket?—Mr. Alcorn: Yes. A sum of £95,000 was already in the hands of the British National Investment Trust and £25,000 in the hands of the Investment Executive Trust.

Do you consider you were under any obligation to see that the company got the value of the shares? —No. The company were going Into liquidation.

Air. Alcorn was further questioned about the King Street building. He said that on Alarch 1 it was decided to lease this property to the British National Trust for 99 years at a yearly rental of £7500. Air. Alonahan: That just suffices to pay the interest on the mortgage, also the rates and taxes.

Referring to the resignation of Air. McArthur from the British National Investment Trust Air. Alcorn explained that his going into that company was a mistake. There had been some trouble with the printing of the names and a special rescinding resolution was necessary.

The Commissioner: So he became a director by mischance. That is the first lime I have heard of a case where a man becomes a company director through a printer’s error.

Mr. Monahan: Very handy to fade out like that after piloting his shares through.

Mr. Monahan; What assets were there to represent the £55,000 you got from the British National Trust and which I suggest was public money paid out of debenture capital?—Mr. Alcorn: The debentures were a floating charge.

Exactly. And that charge disappears when the debentures arc paid off. 'There was nothing left. —It was exactly the same as before the debentures were paid off.

Supposing the British National Investment Trust was placed in liquidation, where would the holders of the preference shares stand?—The Commissioner: I suppose they would have the lease. We must assume that a lease for £7500 a year lias a value. Mr. Monahan (lo Mr. Alcorn) : Whatever was left was sufficient to pay a dividend on Hie shares? —Mr. Alcorn: Yes, at a rate of 7 per cent,. Later Mr. Alcorn admitted that he had received 76,100 shares in the notation of Hie Soulhcrn British National Trust—one-fifth of the ordinary shares paid for by the sale of debentures In the British National Trust. Subsequently he sold his lidding of the Investment Executive Trust to that company lo hand over the control of that trust to the Southern British National Trust.

That had happened by the tlmo they all loft New Zealand with the books and records.

Mr. Monahan: You had not produced your hooks to the New Zealand Commission? —Mr. Alcorn: No, definitely. Hite bringing of the books here had no relation lo this inquiry?—None. Beferring to Mr. Alcorn's personal drawings. Mr. Monahan asked whether lie had had £2200 mi! of Sterling Investments since March. Mr. Alcorn: Yes. I had sold two debentures, of which I had 16 or 17. 1 handed over the first debenture in

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Auckland. I think Mr. Glasson debited me, instead of crediting me, with it. Dr. Louat informed the commission he hoped to have the balance-sheets of the Investment Executive Trust and the Southern British National Trust ready by to-morrow. Mr. Monahan said he required a list of the securities of all the companies as at June 30. The Commissioner directed that the securities register be brought to Court to-morrow. The sitting was then adjourned until to-morrow. DOMINION INVESTIGATION. RUMOURS ABROAD. ANOTHER COMPANY CONCERNED. WELLIN'GTON, Tunsday. A report that further action rising out of the investigation being made by the Companies Promotion Commission was contemplated by the Govermdcnl was in circulation in Parliament Buildings to-day and the name of a certain Auckland company was coupled with Ibis report. That report has not reached me,” said the Minister of Finance, Mr. Goales, when questioned this evening. ” Something may have come under Ihe mil ice. of the commission in Auckland about which 1 have not. been advised." lie added. Mr. Coates denied definitely Iha I any further legislation in connection with the Companies (Special Investigations) Act was contemplated by the Government or that the issue of any Order in council touching the same question was being considered.