The N.Z. Loan and Mercantile Agency Co., Ltd.

Manawatu Herald, 10 April 1894, Page 2

The N.Z. Loan and Mercantile Agency Co., Ltd.

In the course of his examination before Mr Justice Williams concerning the New Zealand Loan and Mercantile Agency Company, Mr Larlcwor thy said that in 1890 he reported that there were further deficits, and that the reserves were exhausted, but the Board took no notice oflthe matter. Losses amounting to £848,-----000 appeared on the balance-sheet as assets, and the statement of profit presented in 1889 included interest on that sum, although it had pot been paid. He added that of r the directors only the Eight Hon A y J. Mundella supported him inpiroposjrig that an independent ihfcpfcetbjfshauld be employed to inspect the Confpany's properties and ,reporTf dtftfot to the London Board. He described certain statements made by the'.Hdn W. Shiels, of Victoria, in his speech at the London meeting, as grotiiy untrue, and said Mr Shiels ijjsj^a friend of Mr David Elder, ihemfl' ral manager of the Company i^fims* tralia. In reply to some severe questions pnt by the Judge, the witness admitted that had Mr Shiels known the true facts of the case, be would not have spoken as he : did, an.<| ]ie also admitted that he himself haft ! now confirmed statements contajngd iv Mi- Shiel's speech, to flrhiebpexception had been taken. He sai&he did not consider it his, duty to j£ : monstrate at the time. . ,^ ? . In reply to another question " i Mr Larkworthy said he had also acquiesced iv the balance-sheet at the same meeting, believing as he did that the reserves would cover the Melbourne deficit of £480,000, wbioh had not then been revealed. Cousel complained of the manner in which the witness gave his eti* dence, taking particular exception to his hesitancy in answering, and. his inability to remember certain things. v :^ The Judge urged the witness to be perfectly candid in giving big evidence. > Mr Larkworthy said his salary was increased in 1890, although his authority and duties diminished owing to the fact that Mr Paul*, the London manager, and Mr Thomas Bußsell assumed more control. ' Personally, he had dissented from this arrangement. In reply to a question, he saidjhe did not remember approving '. of !b certificate depriving the debentureholders of security, The examination of Mr Lark* worthy has ended. " "\^-. Mr Paul, London manager of tea New Zealand Loan and Mercantile Agency Company, was next ex. amined, and gave the history of the alteration in the debenture prospectuses, which Mr Justice^ WiHUitus described as not confirmed ,by*H4fo documents ( ftna 'astonishing:^ "' * In hjs . examination jaefore Mr WiUJavii, Mr J^ virtually jufmifcted that there was nothing in the new form of debentures to notify holders of the change. The Bourd, he said, was well aware that there j was no special security. While the 1 Company was negotiating with Baron Scbroeder, the Company issued a considerable quantity of debentures on the old basis. In reply to the Judge, Mr Paul

said he was unable to explain why at the time of the Schroeder issue, the directors failed to clearly indicate that the old holders were nob secured. Continuing his evidence, he said that Mr Larkworthy's report had been postponed in deference to the wishes of Mr Thomas Russell, and had not been investigated. He added that Mr Barker had in 1892 reported a deficit of £690,000. The ..Board had not discussed the propri"Sty of specific mention being made ih the report of 1892-1893 of the Company's holding £393,000 worth 'debentures of the New Zealand-Land-Association. . •