LOAN AND MERCANTILE.

Temuka Leader, Issue 2645, 12 April 1894, Page 1

LOAN AND MERCANTILE.

London, April 8. During the course of his examination Mr Larkworthy admitted that he had approved of Mr Thomas Russell’s security for the advance obtained by him. Mr Paul, in his evidence, was unable to say who actually altered the form of application for debentures in 1888. He admitted that the form was misleading. Still, he believed the fact of the debenture holders being deprived of their security was accidental. The solicitor had added a paragraph to the draft report of 1890, giving details of the company’s l oss durthe year, but it was suppressed by the directors, who thought it too strong. The Judge there interrupted with the remark —“ Is truth too strong.” Continuing, Mr Paul said that the majority of the bond-holders in 1888 wore aware of the absence of special security, April 9.

During hia examination Mr Paul hesitated before he answered several of the questions, and Justice Sir R. V. Williams severely rebuked him for the absence of candour and frankness which characterised his evidence. Mr Paul ssid that the confidential report furnished in 1892 by Mr David Elder, general manager qf th e company In Australia, wits nqt oppued until June 1893, owing to the receipt of a cabled request from Mr Elder to await advice.

His Honour asked why he was not suspended when the directors discovered they had been tricked.

Mr Paul explained that Mr Thomas Russell was in Melbourne at the time aud had seen the report before it was sent Home, His Honour: That makes the incident more surprising.

Mr Paul, continuing, said that nothing had been written off 'he properties, although they were not earning a penny. The company since 1890 had been in great straits owing to want of money. Mr Hollams, the solicitor, had not approved of tho prospectus of J 879, which was presented to the Board as though it had received Ml’ Hollaujs’a approval. Mr Paul informed thu Court that he sold his shares in 1889 and on the 0 h June last. April 10.

Mr A. J. Mundella in his examination denied that he was aware that the prospectuses regarding the security of tho debentures were misleading, but he thought them only ambiguous. He condemned tho colonial board’s greediness for business and overtrading up to tho hilr, against which he had protested. Tho suggestion that ho was guilty of a policy of concealment was a gross injustice, but he thought that it would be injurious to inform tho shareholders of Mr Larkworthy’s report without confirmation Mr Paul, he said, never mentioned tho company’s holdings of Waikato lands in connection with tho balance-sheet of 1891.

The Judge described tho company's transactions in Waikato lands as unjustifiable as an investment,