CHRISTCHURCH, SYDENHAM AND SUBUBBAN BUILDING SOCIETY.

Globe, Volume XXIII, Issue 2256, 21 May 1881, Page 3

CHRISTCHURCH, SYDENHAM AND SUBUBBAN BUILDING SOCIETY.

The annual general meeting of the shareholders of the above was held last night in in the Canterbury Land Saleroom, Hereford street. Mr W. 8. Sing, the ohairman _ of the Board of Directors, occupied the chair. The advertisement convening the meeting having been read by the manager, Mr Whitelaw, The Chairman read the balanoe-sheet of liabilities and assets as at April Ist, 1881, which was aa follows :

Liabilities—To shareholders (permanent and ordinary), .£3159 2s 3d ; deposits bearing interest and interest accrued on same, £7102 5s Gd; Bank overdraft, £2545 2s 2d; redemption money on loans not yet taken up, £2 14a 2d; profit and loss (balance to credit), .£4B 3s 3d; total, £12,857 7s 4d. Assets—By amount of principal due by borrowers, £9897 7s Id ; by arrears of interest and fines, .£l3l 6s 9d ; by officß furniture, £96 6s 6d ; by insurance premiums paid on borrowers account, £22 15s ; by amount overpaid on withdrawal of shares to be collected, £8 65—£10,159 Is 4d ; by balance represented by AV. W. «:harterß' defalcations, £2698 6s; total, .£12,857 7s 4d. The report of the directors was then read as follows: —

Your Directors have on the present occasion the painful duty to perform of making known to members of this society the facit that, as disclosed by an investigation of its books made since the resignation of its late Manager (Mr W. W. charters) the funds of the society have been defrauded by him to the extent of .£2698 GsYour directors had their feelings of uneasiness and distrust respecting Mr Charters so far aroused, as to have provided for the managership of the society passing out of his hands at the end of the ye*r; they had also been at considerable trouble to prevent or detect any tampering on his part with moneys belonging to the society, but they were not aware of any specific charge on which an information could be laid against him until the 23rd of April last. This was b'oughtto lightonly after a lengthened investigation of the books by the society's auditors, and, unfortunat ly, not till after the late manager had, as is supposed, sot sail for England. As to is cow being proceeded against on a criminal charge, the directors are for obvious roasons withhold from entering into details with that fulness which, under other circumstances, might have been expected at their hands. In intimating so serious a loss of the society a sub_ scribed capital as that above named, the board of directors feel that their conduct and actions arc necessarily exposed to criticism of a severe and adverse chaiacter. They, however, feel conscious of having done all within their power to avert the disaster which has overtaken the society: consequently, they have nothing to conceal from the members concerning their management. The directors place themselves entirely in tho hands of the members, to whom they will willingly furnish every information within their power. The directors report with pleasure that they have secured the services of Mr John Whitelaw as manager of the society from the commencement of the current year. Tho members of the board of management retiring by rotation are—Messrs W. Langdown and W. Neighbours, who are both eligible for re-election, and have given the requisite notic*. A third ordinary vacancy, caused by the resig-

-niber lost of Mr G. Coleman, nation in BlWv nary vacancy created by Mr and an '•» March last, have also to Back's resignation x. " B. Kirk and W._ J. be Me3STB l >». nominated for election. Williams have been <Ht;S . W. S. Ifesa, chairmay,- i Se direotors had The Chairman said* Shift!" W -\ re B suppleinstructed Mr Whitelaw fiopirajK -%-hich had rrientary balance-sheet as eft' data,. > closed be3n done. Sinco the current y«9» the there had beea a torn of JBlOO'paid' Jff S> -,f Bank, which would reduce the &&?'&& *■ defalcations of the late manager, and theftf would also be the guarantee policy of £506 of the late manager in the Standard Company. Ho might say thai" cheques purporting to be signed by Mr LaDgSown and Mr Neighbours had been discovered that evening to be a forgery. These amounted to some £7OO, which would go to tho- credit of the deficiency fund. He desired to afty that the direstors would afford tho fullest information to shareholders on the subject. One thing he might mention, and that was as to a oheque for £'JOO, a receipt for which had.been given Sy their solicitors, and which had been overlooked at the audit, not, however, through any fault of the auditors, 33 Saey had a receipt before them for the aicsunt. He would now move that the report be received. Mr Douglas seconded the motion. In reply to Mr Harley, The Chairman said that application had been made to tho Standard Society for the amount of the guarantee policy, nod he had been informed that Mr Fioher ww ooming to Christchurch on Wednesday next. Mr Scott had told him that the society would require him to make a statutory declaration as to the lobb sustained by the society. Mr Fearce said he desired to maktt a brief explanation as regarded that paragraph of the report having reference to the directors not being aware of the defalcations of the manager. He, it was well known, acted as clerk to the firm of Draper and Chartero; and might have been expected to know day by day far more than tho directors any defalcations that took place. He might say that up to tho timo of Mr Charters' leaving, he dad not know that any defalcations had taken place, and so the directors could hardly have been expected to know. In reply to questions, Mr Pearce explained that the subscriptions and current moneys coming in over the counter were paid into the Bank. The defal- j ontions had occurred through the detention of | cheques and other modes. The Chairman said he might mention that Mr Pearce had told him of a case in which money had been taken out of the cash box of the society, and he at once called a directors' meeting. In August last there was a cheque for £3OO taken, which seemed to be the first defalcation. The cheques for withdrawal of deposits, &c, were appropriated by the manager to his own use. He might say that the directors were prepared to give a detailed list of the defalcations and the explanations of each. Mr Harley desired to say that the intermediate audits in societies such as had been made was a mistake. As regarded the £3OO cheque there was no overlooking on the part of the auditors, as there was a voucher produced, but the excuse was that the securities were at the solicitors. All the auditors had to do was to Bee that the money paid in was at the Bank, and that the expenditure was accounted for by vouohers. The auditors had not seen all the securities, but they had a list of them as held by the solicitors. Mr Pearoe suggested a monthly audit of the accounts of the society. Mr S. Smith aeked if the £3OO was to be considered as a loss P The Chairman was not preparel to say bo at present. Mr Douglas (of McOonnel and Douglas) stated that Mr Charters always came in a great hurry, and it was possible to give a receipt more than once for the same sum. Recently, he came in and asked that, as an audit was pending, he be given a blank receipt, whioh the book-keeper handed to him, only filling in the date. He saw it only a few days ago with the name of Baxter filled in and the date altered. This, although a genuine receipt, was a forgery, as it referred to Greengoe and not to Baxter. The figures on the stamp were also obliterated. Charters said it was for Greengoe's affairs, but made it out for Baxter by subsequent alteration. It was a duplicate receipt. Mr Harley called attention to the difficulties the auditors labored under through this manipulation of reoeipts. The Chairman, by request, read a list of Mr Charters' defalcations. Mr Whitelaw then read a supplementary balanoe-Bheet as at May 20th, 1881, which showed the liabilities to be £12,023 0s lOd, and the assets, including deficiencies, £2732 lis 7d, being £2550 5s 5d defalcations of the late manager, and £lB2 6s 2d balance to debit of profit and loss, giving charge on subscribed capital, whioh together made the total up to £12,023 03 103. The Chairman stated that an estimated contingent asset of £I2OO, viz., £SOO Standard Company's guarantee, and £7OO _ forged cheques might be available. The direotors were willing to offer themselves again for reelection, and would try under the new management to pull through. More money must be put into tho society. At a rough estimate he thought the shares were worth 8s 9d in the £. The balar.ee must be written off, and with fresh capital ho felt sure that the society would succeed. Mr Harley thought, with the dead weight on it, the society would have but a poor chance. Did the chairman mean that the shares should be capitalized. The Chairman said the shares would have to be reduced to their actual value, as no new shareholders would oome in with the dead weight on the society. They (the directors) were in the society's hands. Mr Pearoe suggested that as tho subscribing shareholders might wish to look into matters, the meeting stand adjourned for a week to allow them to go through the accounts. The directors agreed with the suggestion. The Chairman showed an interim balai.ee sheet, prepared by Mr Charters, to April 4th, by whioh it was shown that the profit of the society for the paßt year was £l9l 18s, over 7£ per cent, on shares. Mr A. M. Ollivier said it was a mistake to audit accounts unless the books were previously closed, and it was also a mistike that they had not been so closed at the last annual audit. The cash reoeipts were examined and verified as paid into the Bank by Mr Harley and himself as auditors. He thought the system of interim audits was improper and worse than useless, since it failed to exorcieo a check on defalcations. He would a?k, did it ever occur to the directors that the money they had on deposit, or borrowed, was greater than it should have been, as allowed by the Act ? The Chairman replied that the direotors were alwajs very careful to keep within the limit, but now they wore a little beyond it. There was no doubt that Mr Ollivier was qujte correct about closing 'he books for the purpose, of audit. In reply to a question the number of ordinary shareholders was stated to be forty, repreaen'ing 743 shares, the permanent shareholders being thirteen, numbering forty-nine shares. Mr Ollivier thought it very unlikely that any freßh shareholder would come in, and it was equally unlikely that the present shareholders would add to their shares. If other defalcations cropt up, it would make matters worse. He did not think it any use for the society to continue, and he also thought it should accept its present position and losses, and wind up. At tho adjourned meeting all could como with their minds made up as to their future action. Mr England said the directors woro prepared to take up Beveral hundred pounds' worth of permanent shares, and givo the society a fresh impetus, and ho hoped it would continuo its operations. Mr Pearce moved the adjournment of that clause of the report having reference _to oarrying on tho society, and that the meeting stand adjourned till that night fortnight. After considerablefurtherdiscussion.during which the low current rates of interest were oonßidored, the motion wbb put and carried._ Tho meeting was accordingly adjourned till Friday, June 3rd