ALLEGATIONS OF FRAUD

Chronicle (Levin), 17 August 1948, Page 5

ALLEGATIONS OF FRAUD

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Two Company Officials Face Serious Charges *

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CHRISTCHURCH, Aug. 16, An inquiry into the affairs of th€i Southern 'Cross Construction Co.,; now in liqui-dafion, was begun -in, the Supr'eme Court, Christchurch,! today.0 Wiiliam Samuel Newburgh, com-. pany director, and >Peter Belfordi 'vVatts, public accountant, appeared: on,.a summons under a section of; the Companies Act to show cause; why they should not be debarred' from actmg as company -directors or being concerned in the manage-| ment of a company for a period not exceeding five years, as the: Court might order. Mr. JusticeFleming presided, Mr. G. G. G. Watson being associated with him. Mr. A. C. Perry appeared for the' official assignee and with him was Mr. T,° P. Cleary. Mr. T. A. Gres-, son appeared for Newburgh, while' Mr. E. S. Bowie appeared for Watts. The current proceedings follow, the hearing on June 2b, when, on behalf of the official assignee as liquidator, Mr. A. W.. Brown said that Newburgh and Watts had supplied the official assignee with certain information which he would have sought at a public examination and which, therefore, was not now necessary. Opening* the case for the official assignee, Mr. Watson said that the applications were based on allegations of fraud made in the assignee's report. The action was brought, not ,oy way of punishment, but as a protection to shajreholders. He said that the proceedings were based on two speeific charges of fraud, primarily that de.fendants while acting as directors improperly manipulated moneys of the company to give preferential treatment to Newburgh who was actually an unsecured creditor. Also, that the del'endants, knowing the company to be unable to pa'y its debts, incurred further debts. The case is proceeding.