Company Commission

Waikato Times, Volume 116, Issue 19364, 18 September 1934, Page 6

Company Commission

DIRECTOR’S POWERS. MR PILKINGTON’S ADMISSIONS. mr McArthur again in box. United Press Assn.—Elec. Tel. Copyright. SYDNEY, Sept. 17. The Royal Commission which is in l quiring into the activities of trust companies, the number of which has been increased to 31, continued its investigations to-day. Mr Justice Halse Rogers presided as Commissioner, Mr W. W. Monahan, K.G., 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 Trust, Limited and Dr. F. Louat for three other companies. After Mr. Pilkington had been further questioned concerning the purchase of the Trust Building the Commissioner directed Dr. Louat’s attention to the dates of the purcha|e transaction. He said one of his duties was to recommend whether any of the companies should he wound up. If it appeared that Messrs. McArthur and C. G. Alcorn had in law no right to these moneys, that would be a very strong reason that all the profits should be diverted to the deben-ture-holders. If the 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. Mr. Pilkington was then questioned regarding the principles of the Investment Executive Trust. Facing the Facts. The Commissioner: As I understand the scheme there are very few shareholders in your companies. Most of the share capital is held hy two men?—Mr. Pilkington: Yes. So the debenture-holders have no say whatever In the control of the company?—No. Practically these Investments of your companies and the share holdings are entirely In the oontrol of one man?—Yes. You have debenture capital amounting to £400,000 and as far as we know the real capital subscribed by shareholders is practically negligible? —Yes. So that it Is practically one man who is inviting the public to place capital unreservedly at his disposal?—No. lie is subject to the directors. Let us-face the facts. If you opposed Mr. McArthur to-morrow on a matter of principle I suppose you would go out?—Of course, if he wanted me to. Replying to Mr. Monahan Mr. Pilkington said his co-directors in the Investment Executive Trust had been Messrs. 11. 11. Pollard and McArthur. He had heard a rumour that Mr. Pollard had resigned. At the last meeting of directors at which Mr. Pollard was present a proposal had been put forward to give Mr. McArthur a power of attorney, but Mr. Pollard had taken the view that since the Commission had begun Its sittings it would be dangerous to transact business of that nature. Furthor questioned witness admitted that a power of attorney was prepared so that Mr. McArthur could perform In New South Wales any acts of a director. Mr. Monahan: Mr. Pollard was not prepared to sign It so you came over to New South Wales? Mr. Pilkington: I had arranged to come over before that. Did Mr Hope, a former director, retire because the 'operations of the camp any were not to his liking?—No, because they were too big for him. It had nothing to do with a balancesheet. He retired at the same time as the auditor, Mr. Anderson, got out. Mr. Pilkington was further questioned regarding the Investment Executive Trust’s balance-sheet to which Mr. Anderson had taken exception. He said there had been a division of opinion as to the line of demarcation between brokerage charges and commission charges. Only 5 per cent had been stipulated hut V. R. Mclnnes and Company had received considerably more. Mr. Monahan: Did you show Mr. Pollard the report which was sent hy Mr. Anderson to the board?—Mr. Pilkington: Yes. I put it to you that Mr. Pollard was never told of the dispute with Mr. Anderson? —I do not know. (Mr. Anderson was invited to meet the directors, yet Mr. Pollard was not present? —I do not ’•emember. British Medical Trust.

Dr. A. E. Colvin appeared to explain his connection with the British Medical Investment Trust, Limited. He said that Major M. L. F. Jarvie, of Ihe New South Wales Legislative Assembly, had told him the trust wanted a medical man on the board. Major Jarvie had said the company was the same as dhe British Medieal Investment Trust in England, that that company worked in conjunction with the British Medical Association in England and that ihe new company would work with the British Medical Association. Witness said that Major Jarvie also had informed him that Dr. Hunter, secretary of the Sydney branch of the British Medical Association, had told him mat it was a good thing such a company was being formed lo safeguard the interests of medical men.

Witness, in consequence of certain things lie had read, had subsequently suggested that on account of his own ill-health the matter of his association with the company should be left open fer about 12 months, after which he would sec whether (lie comi any was working properly and with 1 lie approval of the British Medical Association. Later lie had withdrawn from being a director on Hie ground of ill - health. Mr. McArthur Recalled. M'r. J. W. S. McArthur, recalled, produced pass books of his bank accounls. iMr. Monahan (referring to one of the pass hooks) : What is this cheque paid in for £IOOO Mr. McArlhur: That was an advance made lo me from either Hie Soul hern British National Trust or the British National Trust. 1 cannot remember which. Was it not the balance of a mortgage advanced by the. Australian Class Company? —if it is I paid £3OO in (CouUuutu ic next column.).

procurator’s fees 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. 1 suggest you employed that for personal uses, but we will go into that * a Monahan asked: You and Mr. Alcorn have made profits on paper of £310,000, have you not? —Mr. McArthur: No. There was one for £287,000? —Yes. And one for £77,000 in connection with sales of Southern British?— That did not affect our position at all. It does not mean that there were any profits made. The share capital was increased. But that was only done after this commission started. Aou appealed in the books of the Southern British National Trust as a creditor?—Yes. Mr. Monahan then questioned Mr. McArthur regarding the exchange of certain cheques. The Commissioner: 1 may take it that all lids was done because you did not wish the facts to he disclosed to anyone?—-Mr. McArthur: Not to the banks. Is not, this scries of transactions a cloak over the fact that, you have certain holdings obtained in this way?— AVc did it to keep the true facts from our opponents. At Ibis stage the commission adJourue.d until to-morrow,