DIRECTOR'S EVIDENCE

Chronicle (Levin), 22 June 1948, Page 3

DIRECTOR'S EVIDENCE

Press Association)

Tlie Case Against George And George

(Per

WELLINUTOiN, June 21. The liearing of tlie case against George and George, Ltd., and two directors, alleging 1(3 false returns of income between Decemb'er, 1943, and SeptemberJ" 1947, today entered its fourth day in the Magistrate's Court. Eiglit of the eharges concern Alfred Leonard Roediger "George — four' of tliese involve his capacity; as a directoi — four are preferred against Clifford Delfrav Andrew George relating to his priva'te income, and the remaining four eharges are laid against the company. A plea of not guilty has l>een entered to all eharges. Counsel for the defendants', Mr. W. E Leicester, today cailed Alfred Leonard Roediger George to give evidence. The 'defendant described in detail his association with the eompany, tlieu a partnership, since he hrst workeil tliere when a schoolboy of 10 or 11, and gave details of his earnings and savings. From 1930 to 1947 he had received from tlie firm in salarv, bonuses, dividends and director's fees, some £32,300 while his Army pay had iucreased this to £33,999. Over this period lie had paid £8(513 in taxation. Irrespective of the 12,500 shares from the firm he had acquired assets worth £16,,' 57(5 in tliis period. Savings had been used in casli purchases, and wero thus translated into assets. The defendant explained that his vvar service was speut in New Zealand, and tliat when his brother vent away he gave liim full charge of his savings — about £6000. Prior to March, 194], lie had kept no personal bank account, but wheu he weut into cainp and realised he might go overseas he decided to open an account. From 1939 to 1946 the eompany 's boolcs sliowed his drawings as £20,335 in addition to whicli there was considerabie Army pay. He had kept on s'aving during the war as previously. Mr. Leicester: A former cliief iuspeetor of tlie Incoiiie Tax Department said that between 1943 and 1946 the unidontiliable drawings amounted to £2611). I ii your view did that comprise a considerabie portion of savings ou vour part? Wituess: Most eertainly. Mr. Leicester: Aniong the umdentiiiEible drawings did the iuspector include living expenses ? Wituess: Yes, practically everything tliat goes out to run a lioiue. Defendant agreed that the auiount had been reduced by a subsequeut inspectoP by £3027 for tlie pavnient of wages tax. Mr. Leicester: Was it your habit to pay wages tax from personal resources ? Wituess: Yes, from liquid eash resources. Defendant said tliat in 1932 - his : salarv had been £520, which had l'isento £1580 in 1940 until now it was £2000.. That auiount did not include dividends! and bonuses. He said tliat since Deceniber, 1947, his assets from the National Bank had been translated into a niotor launcli and a house. Mr. Leicester: Did the cliief iuspector: jn any other iuspector^ make investiga-; tidiiS allto 'your- savings' prior to 1930? Wituess:* No. As far as I kuow he' did not. Defendant said that although tlie eompany had not made over £2000 a, year prolit from 1930-46, he had ro-' ceived a considerabie salary over that' period. He had also reduced his' standard of living. He did not at any timo consider lceeping savings in Postl Office accounts. Between 1940-46 Jiis income tax was assessed at tlie rate of 17s 3d to 18s in the £. There would consequently nave beeu no advantage in the sma-li savings bank interest. George said that when Gurran canie in March of this year, tlie casli imvard* Iniok was available for iuspectiou. This books embraced uumbers of years but Ihe outward casli books had been dcstroyed. Tliey had, however, been available to Young aud he had made full use of tliem. Before he had linislied his iuspectiou Young. had advised the firni to keep books for five years and i-i order to make room for records for the next liye years tlie casli outwards book was destroyed along with other book». Young, before Christuias, told the lirm he had linislied his iuspectiou and tliey had then tried to put tlie house in order lo keep future records and two cart-' ioads of old dockets and books we.re takou away from the office. Cross-exainiiied by Mr. Birks who 1a ippearing for tlie (Joniniissioner of laxes, wituess said tlie lirm's casli was not used in purchases because large enough suins wero not available. A l'und liad to be set up with Miss George for linancial transactious. Had tliey used tlie eompany 's funds tliey eould not have made payinents promptly. Ht* added that it was the lirm 's practice to ilestroy invoices for the past linancial year when payments had beemuade. Evidence of Clifford George Clifford George, in evidence, con linned most of what his brother Alfred had said. Gifts had beeu given to liim from his father. He had about £5800 at, the outbreak of war, to hand to his brother. Until 1938 lie had lived as i batclielor." His living expenses could not liave beeu niore -than £2 a week. From January, 1940, until August, 1944, he was in reeeipt of Army pay, during whicli tinie he was in a prison caniji for 14 montlis spending no money. On returning home he received two cheques from his cousin, oue for £700 as a git't to liiui and the other for £400 whicli was change t'roui £500 he had given instnictions to be kept so that his wife and cliild i\ould have some money ii Wellington were evacuated. Mr. Young, former cliief iuspector of tlie hicoine Tax Depai tm-fent, had adequate opportunitv to inspect the cash outwards analysis hook. Wituess said he knew of no single iustance to which Young had pointed ot a sliort stating of cash saies. To Mr. Birks witness said the records of his brother's dealings with his cash had been given to hira and he had destroyed them. He and his brother had the right, under their father 's will, to purchase shares from a sister and this was exercised in 1942-43. , At the conclusion of the evidence the M agist rate stated he would give his deeision t.omorrow afternoon, .