HECTIC FINANCE

Sun (Auckland), Volume IV, Issue 1015, 4 July 1930, Page 11

HECTIC FINANCE

BUSINESSMEN FACING SERIOUS CHARGES COLOSSAL FRAUD ALLEGED ! United P.A.—By Telegraph—Copyright SYDNEY, Thursday. ! The trial was begun today at the ! Sydney Criminal Court of several wellknown commercial men who are associated with tlie Australian Federal Life and General Assurance Company. ! Ltd., on charges of conspiracy to dej fraud. | The defendants are Albert Smith, I aged 45, a broker; James Cochrane, | 42, an accountant; Vivian Partridge, I 38, a managing director; Ralph Paul, j 34, a secretary; and Harry Roach, 39. | an accountant. j The Crown Prosecutor described the ■ alleged f r aud as one of the worst ever perpetrated in tlie history of New South Wales. The balance sheet to November, 1925, showed that assets were over-valued to the extent of £115,000. The building occupied by tlie company was written up £9,000 above its true valuation. x Counsel spent the whole day in analysing the finances of the company. He said the balance sheet at the end of December last showed cash in hand as £4,000, but it was in fact only £4. PAID 44 PER CENT. It was stated that the company had absorbed a People’s Prudential Com pany, one director of which was paid at the rate of £l2 for each of his shares, whereas private shareholders received only 325. The company borrowed £45,000 in Melbourne, with which to purchase a j controlling interest in the People's Prudential Company, and the rate of interest was about 44 per cent, for three months. Eventually both companies were forced into liquidation. Claims ov policy-holders in April last amounting to £IB,OOO were unsatisfied. Since then hundreds of new policies had been accepted, although the Australian Federal Company was unable to pay its own employees. Another allegation is that Partridge received £9,36S from the company when it was insolvent. The case was adjourned. When detectives made a dramatic raid on April 25 on the offices of the Australian Federal Life and General Assurance Company, the amount involved in the charges was said to be £500,000. While detectives were investigating tho affairs of the company on April 27 a large crowd of people gathered outside the office and made a hostile demonstration against some of the officials. An ugly situation appeared to be imminent when the investigating officers escorted an official of the com pany to a motor-car, in which he was driven away amid angry shouts’ and jeers. Another official evaded the crowd by leaving the building through an entrance at the back.