The Colonial Bank.

Feilding Star, Volume XVIII, Issue 170, 20 January 1897, Page 2

The Colonial Bank.

RE POUT OF THE LIQUIDATORS. THE WARD ASSOCIATION. | Per Press Association! Dunemn, January 19. The interim report of the liquidators of the Colouial Bauk complains that i sufficient discrimiuation was not exercised in the classification of accounts, particularly as regards the B list. After a lengthy analysis of the Bank's position, they say : - At the end of 1892 the Ward Farmers' Association had an overdraft of £'81,685, though the directors had only authorised £45,000 In 189 t the accommodation had increased to £122,187. The directors must have known this, as they had the weekly reports before them. A lew days after .June HO each year, for the purposes of the Assciatiou balance-sheet, the ovcl'n druft was reduced by special operations. j Twice Mr Ward gave his cheques for j £21,000 and 185,000, and when he was j out of the colony in 1H95 a draft for £'i 30,000 on London was discounted at the request of the Bank's general manager. Of the deceptive nature of these operations tin: Bank management could | not be i»nor\nt, but the auditors took no notice of thorn The liquidators say it was not surprising that when the assistant inspector's report of August, 1890, was laid before the directors of the Colonial Bank, the latter were shocked and alarmed, as they were eugaged negotiating with the Bank of New Zealand for the amalgamation. The directors then, for the first time, discovered serious loss by Ward's or the Association's accounts. The directors' task then became most difficult, as they weru considering a balance sheet which wan the basis of a proposed amalgamation, and with the concurrence of the Bank of New Zealand came to the con elusion to write £55,000 off the indebtedness of the Farmer's Association to the Colonial Bank as being better in the the interests of the shareholders. In giving effect to this agreement, we cannot agree that the course followed was a proper one — namely, taking Ward's promissory note for £'55,150, and giving authority for the transfers in the Bank of New Zealand books, which were made as if the note were cash. The liquidators failed to see why Ward's n'te ou Cooper and Sons, London, for 125,000 was not to be prescuted, and why it was kept in London for nearly twelve months ; also, what was the reason in August, 1895, of the transference of £16,000 of Ward's indebtedness to London. Referring to K. Anderson's ' and John Rylry's accounts, they say they involve very large figures and heavy loss. Looking at the history of these accounts, the liquidators expressed unbounded astonishment that the management were even induced to advance so large amounts on such inadequate security. Matters would not have turned out so badly had not Riley de ceived and defrauded the Bank, which he certainly did. Dealing with the past management of the Bank, the liquidators make the significant remark that it is obvious that for many years the col onial reserve fund could have no real existence.