MEAT COMMISSION

Manawatu Standard, Volume XLV, Issue 125, 30 April 1925, Page 2

MEAT COMMISSION

EVIDENCE TAKEN AT GISBORNE Per Press Association. GISBORNE, April 29. The Meat Works Commission re-opened its enquiry at Gisborne this morning. -It is understood that between 30 and 40 local witnesses will lie called.

Mr Lysnar suggested that, the commission should visit the works in the afternoon. Mr Myers eaid that it. did not interest tho bank to see the works. He had come to Gisborne to get the work tinished as early as possible. Air h>. Jones also opposed wasting time inspecting the works. The chairman said that the commission would visit tho works to-morrow morning. Mr F. S. Bowen, who was a director of the Poverty Bay Meat Company for two years, intimated that he desired to call evidence as to the alleged mismanagement and misrepresentation which brought about the failure of the company. It was arranged that Air Bowen’s witnesses be taken on Friday. The Commission gave authority for the books of the company to be examined by an accountant. Air Taylor: “Does that apply to the papers concerning tho Admiral Codrington ?” The chairman said tho understanding was that all documents be produced to the Commission but not for disclosure to other parties. Mr Myers said that no accountant could investigate the accounts without the ledger. Mr Lysnar: “The Admiral Codrington account has nothing to do with the question.” Air Jones said that Mr Jolly had given evidence that the accounts had to be separated two years before the company's bankruptcy. Mr Lysnar: “The company is not bankrupt and you have no right to suggest such a thing. Tho company could not disclose information to the other side. The company's position was largely due to disclosures previously made to the Meat Board.” Air Jones: “That is quite untrue.” COMPANY’S FINANCES. Edward Plumer Alountford, a retired bank manager, deposed that lie had made an examination of the finances of tho Poverty Bay Farmers’ Meat Company. Tho assertion that the company was in a hopelessly insolvent condition was quite unfounded. After £93,775 had been allowed for repairs and depreciation, tho company showed a profit of £4 18s 2d per cent. Tho losses were largely accounted for by reclamations and the liability tho company shouldered in connection with the shipping arrangements with the Imperial authorities. In witness’s opinion if the Admiral Codrington had been written off entirely the company would not have been insolvent. He accepted Messrs James and McCarthy’s valuation of £401,000 for the works. It was impossible to accept the price realised at auction ns the correct value. The balance-sheets drawn up by the company were fair and accurate; those drawn tip by tho bank were not so. The latter overstated the liabilities by £12,126, and the assets were understated by £266,172. Air Alountford continuing, said that in his opinion tho company could have been safely carried on and he could not conceive any reason for Air Jolly’s statement that it was insolvent. Ho could not reconcile Mr Jolly’s statement that the bank bad lost £4500 with the bank’s own balance-sheet. Air Myers objected to a question ae to the position of the National Bank, stating that it was not revelant. Mr Lysnar: Tho bank has alleged that (he company is bankrupt and insolvent. The company is no more insolvent than the bank itself. All- Myers said the question waa absurd and ridiculous. The chairman said tho witness’s opinion of the financial position of tho bank would not assist the commission. STANDING OF GUARANTORS. Air Alyers again objected when Air Lysnar was questioning witness as to tho financial standing of tho guarantors to tlie bank. The chairman said Mr Lysnar would have to accept full responsibility for anything that occurred to tho questions he asked.

Mr Myers Paid ho did not wish to injure the position of local gentlemen, but if Mr Lysnar forced the position he would not hesitate to go right to tho end of this mutter. Mr Lysnar said that if Mr Myers would admit that the guarantors collectively were good for tho amount of the guarantee he would go no further with the matter; otherwise he would go right ahead and prove that the guarantee was good. Mr Myers: I am not going to make any compromise with Mr Lysnar, but will assure him that I shall not comment upon tho position of the individual guarantors. Mr Mountfort, was questioned as to his knowledgo of tho position of the guarantors, but Mr Myers objected to a general question being asked. Mr Lysnar said ho wanted to know the source of witness’s information. Tho chairman said witness retired from the bank in 1922 and could not possibly give evidence of the position of the guarantors in 1923.

Mr Lysnar said ho was only asking for general information. The chairman again warned Mr Lysnar that he would have to accept full responsibility if he pressed the matter. Witness said that up to 1922 ho would have confidential information. Ho considered tho guarantors, collectively, capable of making the guarantee unless sudden pressure were brought to bear on them. To Mr Myers: If they had been pressed to pay £120,000 within three months, he did not think they could have done it. Mr Myers cross-examined witness as to the valuation ho had accepted for tho works and the ship. Witness said he had reliable information. Mr Myers: On what information? Witness: From Mr Ly’snar. I accepted Mr Lysnar’s statement. Mr Myers: If a ship had been purchased during boom times for £400.000 and in slump times was only worth £55,000, which value would you accept ? J Witness: The lower one. THE SHIP’S EARNINGS.

Witness said he had other information from Mr Lysnar as to tho ship earning £20,000 u trip. On being asked if be thought thero was room for three works in the district, witness rcpleid yes, if the farmers had known which works to support. Mr Myers: As a banker, would you have made an advance to the company on a value of ij400,000 ? Witness: “I would have made the advance in tho usual way.

George Withers, deputy chairman of the company, stated that in May, 1922, he had been present at the conference with Mr Jolly and lie contradicted the latter’s statement that the directors agreed that the Admiral Codrington should not return to New Zealand under tho control of the company. Tho Meat Board was then waited upon to endeavour to make a contract for the ship. When the directors met Mr Jolly in May, Mr Matthews had asked it tho bank intended winding up the company and Mr Jolly

had replied in the negative. After Vestey’s had *iado their offer witness, and AJessrs Lysnar and Coop went to Wellington and met Mr Jolly on September 11 and 12. Tho conference had been opened by Air Lysnar, who said they wanted to go into this miserable business. Air Lysnar had said, too, that only the action of the bank could force tho company to bankruptcy. Mr Jolly bad tried to force tho company to bankruptcy as lie had tried to persuado them to accept Vestey’s offer amicably arid without making tlie bank do tho dirty work. Air Jolly bad told them they could agree to the sale without referenco to the shareholders. Witness told him lie would not agree to such a proposal just to save his own skin. Tho legality of Air Jolly’s suggestion was also questioned, ami even when it was confirmed witness repeated his assertion that lie would not betray his follow shareholders. Tho directors were prepared to do anything rather than have the works sold, and it was suggested that further shares bo issued. Air Jolly asked for time to think the matter over and (he conference adjourned until the following afternoon, when Air Jolly said he would not; consider an alternative proposal. Reference was made to the serious loss to the guarantors and Air Jolly said the bank, too, would bo a heavy loser. He offered them a ooncession of £22.000, but tho directors refused to agree and expressed tho determination to fight to a finish. KEEN EXCITEMENT.

Air Lysnar had said he would stop the sale, lie and Air Jolly being in a state of keen excitement. Air Jolly bad said: “Lysnar, you have as much chance _of stopping the sale as you have of leading Gabriel’s choir in Heaven.” Witness, continuing, doalt in detail with tho Auckland interview, and said that when tlie Admiral Codrington agreed to give a strong concession at Homo she got a full cargo. Then tho Aleat Board complained and the directors took legal advice, which was in their favour and eased their consciences. He did not know a concealed shorthand writer took notes of their interview with the board until afterwards. Mr Lysnar here said that what took place showed what befell deputations to tho Aleat Board. Mr Jones: We’re not sorry we took notes. Air Withers said he could not say the Admiral Codrington had wrecked the company. After tho board was established they intended selling up when tho price was" favourable, but to run her in the meantime. Witness denied that Air Lysnar alone was responsible for the purchase of tho ship. Ho said other directors favoured tho proposal and lie himself was easy. His opinion was that the Aleat Company would have recovered if the board had not found a leady buyer in Vestey’s. Mr Alyers: Would you hvo sold tho vessel to Beelzebub if you had had a chance ? Witness: I don’t know that chap. (Laughter.) Tho proceedings were then adjourned till tho following day.