THE M'ARTHUR GROUP

Evening Star, Issue 22447, 18 September 1936, Page 14

THE M'ARTHUR GROUP

MURE EVIDENCE ON FINANCIAL METHODS ' [Per United Press Association.] AUCKLAND, September 17. Further information about the formation and activities of a number of companies belonging to what is known as the “ M‘Arthur Group” was given during the hearing of the Redwood Forests case in the Supreme Court today. K. C. Ackins, solicitor, said he had been chairman of directors of Sterling Investments from its incorporation and still was a director. His co-directors had been C. G. Alcorn and Glover Clark, but Clailk had resigned after about two years. No cash was subscribed by the shareholders at any time, and as far as he knew the cash to start the company came from the Investment Executive Trust. M'Arthur and Alcorn really ran the company, and dictated all its policy and carried it out. He never did anything on his own initiative, but on the instructions of M'Arthur or Alcorn. Witness said he knew the Sterling Company was buying Investment Executive Trust debentures, and these were being bought by V. B. M'lnnes and Co., and being taken over by the Sterling Company. He understood the object of buying those debentures was to keep up their price. He remembered some transactions dealing with M‘Arthur’s Hillsborough property, and he thought the Sterling Company took it over and also some Newmarket property that belonged to M'Arthur. Witness identified the signatures on a cheque of February 28, 1934, of Sterling Investments to J. W. S. M'Arthur for £60,000, and also a cheque of the same date for £60,025 drawn by Wynwood Investments in favour of Sterling Investments. Mr Johnston; I would like to see a cheque of that size. Mr Barrowclough: My friend has not been long enough in this case, or he would have seen dozens of them. That’s a mere bagatelle. Norman Alexander Duthie, public accountant, said he was one of the inspectors appointed by the Government to investigate the affairs of various companies. Witness described the origin of Kotahi Lauds, and said that Edgeeumbe Forests acquired all the shares in the Kotahi Company. Witness said that in May, 1931, 21,224 acres were sold to Timberlands Woodpulp Ltd., for £33,350. Timberlands gave the mortgage back for £28,350, leaving £5,000, which was apparently paid in cash. The Edgeeumbe Company was wound up in March, 1933, and the books were handed to the Sterling Company for safe custody. When £5,000 was paid back off the Timberlands mortgage it was, in part, distributed in loans free of interest to the shareholders, and loans of £3O 8s and £760 were made to M'Arthur. Witness traced further repayments of £5,000 off Timberlands mortgage, and said that £1,500 and £1,050 were advanced to T. R. M'Arthur, who, he believed, was a son of J. W. S. M'Arthur. Sums of £4,600, £7,750, and £9OO were lent to Sterling Investments. “ The Sterling Company,” said witness, “on March 6, 1933, paid Edgecumbe £19,300 in purchase of its assets. This was two days later lent back to the Sterling Company on deposit at call at 3]- per cent. This £19,300 unsecured loan was an asset of the company, and passed as such into the liquidator’s hands. The hearing was adjourned.