M’ARTHUR COMPANIES FINANCE

Evening Star, Issue 22450, 22 September 1936, Page 6

M’ARTHUR COMPANIES FINANCE

REDWOOD FORESTS CASE LAST OF EVIDENCE TAKEN [Fir United Press Association.] AUCKLAND, September 21. Evidence in proceedings taken by the trustees for the debenture holders of the New Zealand Redwood Forests Ltd. was completed in the Supreme Court, when the principal evidence for the defence was given by M. H. Sampson, solicitor, of Rotorua. Martin H. Hampson described the events leading to the formation of the Edgecumbo Company and its control of 22.000 acres of land. He said that negotiations began in 1919. ami up till 1925 they cost him, about £2,000. J. W. b. M'Arthur joined him in 1922. Witness proceeded to outline the affairs of tho Redwood Com. uiy, of which he became a director at M'Arthur’s request in 1929. In September, 1930, he said the financial position was one of extreme gravity, and the debenture holders scattered throughout the world had only the directors on whom to rely. If trees were not planted out they would become ft total loss and the company, would have to go into liquidation. A substantial number of debenture holders would have got back a small portion of their" money, but the majority would have lost it all. The only solution was to find the money to plant trees. The Edgecumbe Company agreed to transfer 2.000 acres to the Redwood Company, taking no security, and a deed was executed by both companies. That was the 2,000 acres in respect of which a £7,500 mortgage was now registered. Witness said he protested against the sale of the Matahina block at 35s an acre, but was overruled by M'Arthur and Wiseman. Mr Barrowclough said that if Hampson had protested in this matter involving a loss of £44,000 he would certainly have expected his dissent to be recorded somewhere in the minutes. Answering Mr Barrowclough, witness said he believed the land was worth 15s. but his co-directors sold it for £l* 15s against his wishes. “ I was responsible for forming the Queensland Investment Company,” said witness. Mr Barrowclough: Was it formed to prevent the New Zealand Government from obtaining possession of the assets? Witness: Definitely. It was in my opinion tho only manner in which the question of ownership of the Wynwood assets could be tested by the court.

Mr Barrowclough: Am I right in my assumption that the Queensland Company is M'Arthur? Witness: You are entirely wrong.

Counsel: What did M'Arthur put into the company? Witness: Not a match.

Counsel: I know he was not a shareholder, but what did lie give to the company? Of course, the company was formed for the express purpose of taking over his assets. What did it take over from him? Witness: I am not sure. I never attended directors’ meetings. The court was adjourned to hear legal argument on September 30,