PHANTOM FIRMS

Hawke's Bay Herald-Tribune, Volume 81, Issue 83, 31 December 1937, Page 10

PHANTOM FIRMS

Frenchraan's Frauds DIVIDENDS FROM CAPITAL Phantom eompanies, imaginary boards of directors and amalgamationR of eompanies that never existea — yet paid dividends — were described in an amazing Court ease when Robert Annee, aged 55, a bighly-respectablo looking doctor of law, bachelor of science, and former secretary-general of a prefecture, was charged with having obtained money by false pretonceg. Annee entered business in 1919, ereating the Parisian Riee Company. | Fifty subscribera took up shares wjth great eagerness. Then he launched tke French sug&rworks, tke Seine-et-Oise Agrieultural Company, and tke Dusol Foodstuffs Company. Announcing tkat these eompanies kad failed, Annee returned tke subscriptions and collected tke share certificafes, which ke nsed as capital for new eompanies, tke Sugar Reflneries of Prance, and tke Farmers' Society of Seine-et-Oise, He issued prospeetuses and invented a notary to draw up articles of association for two purely imaginary boards. Meetlng "Under Hat" Tke "directors" tken invited tho sharekoider in the four defunct eompanies to subscribe— -which they did* In 1928 Annee ''amalgamated" two non-existent eompanies, Jiolding "under his hat" a genepal meeting of ghostly directors, who voted an incjrease in capital to 5,000,000 francs. He accepted tke resignations of tke phantom directors and etaffs. The new society skowed a profit of 533,811 francs, justifying a fat dividend. Tke sharekolders were defighted. In 1931 Annee gravely advised tkem tkat the chairman of directors, M. Pluchet, was dead. Wreaths from the grateful sharekolders covered the phantom coffin of the imaginary Pluchet. Two new directors, "H. Harrot" and "M. Giffard," was appointed, Annee choosing tke names from a catalogue of agrieultural instruments. Irregularities Discoverefl Pinally, a letter from. tke phantom chairman of directors, "M. Caffin," informed the shareholders that " M. Giffard" was dead, and announced the discovery of grave irregularities whereby the deceased kkd embezzled 293,367 francs. Then someoke woke up. Annee was airested. He had been directors, staff and everything else. From the five millions capital he had returned in dividends and bomistv more than four millions. His profits were djreclol's, fecs aud expenses amounting to 70,000 francs a ! yeat.