OTAGO BUILDING SOCIETY.

South Canterbury Times, Issue 2351, 29 September 1880, Page 2

OTAGO BUILDING SOCIETY.

The sixteenth annual meeting ot the Otago Permanent Building Society was held in the Dunedin Athenaeum on Monday. About dO shareholders were present. The directors in their report stated: —For the lirst time since the commencement of this Society your directors have to present an unsatisfactory balance-sheet. They regret the unavoidable postponement of the annual meeting, owing to the fact that during the course of the audit the late manager, Mr Webb, absconded, and the auditors found the books in such a condition that there was no possibility l- of a satisfactory audit of the accounts. On being made aware of this your directors appointed Mr E. H. Leary, a skilled account, to investigate the alfairs and books of the Society, and to prepare a statement of its affairs up to the end of the financial 3 r ear. This occupied a much longer time than was anticipated, as defalcations and false entries were discovered, extending over several years, the nature and extent of which are explained in Mr Leary’s report, which will be submitted at the animal meeting. From this it will be seen that the. deficiency amounts to T 2 577 10 (Id, and your directors have given instructions that each shareholder shall be debited, as on (he Ist of .March last, with his proportion of the loss. All monies embezzled by Mr Webb during the past financial year have been recovered, but previous defalcations are irrecoverable under (lie terms of the guarantee policy, which only insured the (Society against such defaults as were made within a period of 12months from their discovery. The shareholders arc aware that the Society holds a mortgage over Mr Webb’s property at Hillside. This properly Mr Webb cut up into sections and sold by auction to various persons. It now appears that many of these purchasers have paid Mr Webb the greater portion of the purchase-money, and now find that tliC3 r have no title to the land. Before the date of the last balance, Mr Webb placed the remaining bills to the credit of his account m

the Society’s books, and as these bills are in the hands of a third party, your directors are advised that they are bound to insist upon payment of them, so that those unfortunate purchasers not only lose the land, but are also liable for the amounts of the bill. As (he case is undoubtedly one of very great hardship, your directors propose giving up the bills to the purchasers of the seel ions without payment. Mr R. H. Leary, the new manager reported, I found an account in the general ledger under the head of “Petty Cash,” to which large sums of money had been debited. This was really an account of monies received and disbursed by the manager on account of the society, whereby ho was enabled to pay away and use its funds without authority. When balancing the books at the close of the year there remained a balance of J 8491 Us Ud against this account, which was transferred to a mystifying account headed “ Suspense Account,” which has also been used to cover false entries and to complicate matters. As there were no personal accounts opened for “ Advances on Shares,” I had great difficulty in ascertaining the state of each advance. Having analysed the account I found there were advances to a largo amount for which no securities were held. On pursuing my inquiry I discovered that various sums amounting to £l2-51 had been advanced upon shares which were afterwards purchased by the manager and most of them subsequently sold free of liability. The amount which the Society loses by the late manager, (exclusive of the advances to him on the security of the Hillside property) is £I7BO 10 s LOd. The director’s report was adopted.