Executive Trust

Dominion, Volume 28, Issue 109, 1 February 1935, Page 13

Executive Trust

Sir, —Mr. Nonnan Levy writes re the above in your issue of January 30. This gentleman has the advantage over other debenture-holders, inasmuch as he has sufficiently won the confidence of Mr. McArthur to receive an invitation to.go to Sydney (after the commission was set up) to see the true position for himself. This Mr. Levy did, and he is satisfied that the assets to-day are worth more than 20/in the £l. He states: “I have to observe that his debentures arc covered by sound, solid and potential Stock Exchange securities and real estate valued in excess of 20/- in the £1 and daily appreciating.”

He does not state: — (1) That the Stock Exchange securities are less than £150,000. (2) That the rest of the assets are mainly the Sydney building. (3) That had Mr. McArthur had real vision he would have retained the shares he took over from debenture-holders or bought in the open market, and left this Sydney building alone —gnd to-day the Investment Executive Trust of New Zealand Ltd. would have been in a very wonderful position. (4) That Messrs. McArthur and Alcorn decided to pay to themselves the sum of £287,000 alleged profits out of the building transactions. This £287,000 was the result of operations with the money invested by Mr. Levy and debenture-hold-ers. Had it not-been for the work of the Government, Mr. Levy’s assets, which he estimates in excess of 20/- in the £l, would not now be worth 10/- in the £l. One would imagine that Air. Levy ,and other debenture-holders would show some little gratitude for this large saving of their capital. He then says, speaking of the remarks of a Dunedin debenture-holder: “If he is, uninformed, perhaps he will look sideways on the special legislation that destroyed this w,oi‘k of the builders and ask Mr. Coates how he proposes to make this up to us.” Ye gods. I like “the work of the builders.” It is quite clear that these people are still prepared to stand by Mr. McArthur. If the “builders” Jake for themselves the mere trifle of £287,000 of the debenture-holders’ profits in ' the purchase and sale of a roughly £lOO,OOO purchase, what would be the .sharing of the gumlands millions and the Producers’ Bank? Again : “The sins of the directors dare not be visited on the innocent investors.” Exactly—but not thanks to the poor innocent investors, who were so foolish as to pour thW money into the lap of Mr. McArthur, without having the brains to make proper inquiries. And then when the Government comes to light and tries to save them from their folly, it is confronted with Mr. Normnn Levy and his Auckland friend, in their attempts to fight against the people who have saved them 50 per cent., if not the full 100 per cent., of their capital. Again: “Tweafy-six per cent, in three years and fully secured is an experience we will be happy to repeat and long may it continue." Mr. Levy does not explain how this 26 per cent, was paid. It was paid: (1) In small part out of profits (even this is not certain) : (2) mainly out of capital profits or capital alone. (Whichever it was, was contrary to the principles of the class of trust company Mr. McArthur made his out to be.) “And fully secured”: We have sfj*'n all about this “fully secured” by the fact that the Government had to step in to save £257,000 of

Mr. Levy and fellow debenture-holders’ money. And Mr.. Levy talks of the “work of' the builders” I If the deben-ture-holders of this company are going to be led by the nose by gentlemen like Mr. Levy, in preference to those people who have prevented promoters taking to themselves the profits that were earned by de-benture-holders’ money, that is their affair, and there is no-more to be said so far as I am concerned. —I am, etc., W. G. MORPETH. Wellington, January 30.