H,— 27.

Assets transferred to J. W. S. McArthur personally. (Amounts as shown in reconstructed books (see note below).) £ s. d. (1) All assets, benefits, or otherwise attaching to debenture, held by receiver of Selwyn Timber Co., Ltd. (in liquidation) .. •• •• •• 3,125 7 0 (2) All claims for costs or otherwise against the Wynsel Timber Co., Ltd., to 28th February, 1934 .. .. .. 1>317 11 11 (3) All residues of assets acquired from Edgecumbe Forests, Ltd. (in liquidation), including mortgage from N.Z. Redwood Forests, Ltd., over 2,000 acres of land atMatahina 7,225 6 5 (4) All accounts due by J. W. S. McArthur in respect to— (a) Personal advances .. .. •• •• 7,897 3 2 (b) Additions to Hillsborough property .. .. .. .. •• 6,001 13 0 (5) All benefits attaching to the estate of the late E. M. McArthur .. .. .. 2,100 0 0 (6) All accounts due by the Pacific Exploration Co., Ltd., and 9,979 shares in the Pacific Exploration Co., Ltd. .. .. .. •• •• 20,689 14- 1 (7) All claims against the Investment Executive Trust of New Zealand, Ltd., up to 28th February, 1934 £48,356 15 7 Less sundry credits and adjustments in reconstructed books (being amounts not allocated to individual items) .. . • • • ■ • 7,739 4 6 £40,617 11 1 The amounts shown in the above list of assets transferred to J. W. S. McArthur personally are the balances shown against the several items in the reconstructed books of the Sterling Co. referred to in section 6 (C) of this report. J. W. S. McArthur in evidence before the Royal Commission in Sydney claimed that some items were included in both lists of assets and that certain adjustments were necessary. This aspect is further referred to in para. B (d) of this section of this report. B. Summary of Evidence, Sterling-Wynwood Transaction given before Royal Commission in Sydney. Considerable prominence was given to this transaction during the hearing of the evidence before the Royal Commission in Sydney, and the following is a brief resume of and comment on the evidence given (a) Mr. J. W. S. McArthur, according to a statement submitted by him to the Royal Commission in Sydney on or about 2nd October, 1934 (in this report referred to as his " final statement"), transferred fifty-nine British National Trust Debentures of a nominal value of £59,000, and received in exchange sixty debentures issued by the Sterling Co. of a nominal value of £60,000. No explanation is given of the discrepancy of £1,000 between the two figures. These Sterling debentures were redeemed by the sale of certain assets to Mr. J. W. S. McArthur by the Sterling Co. as at 28th February, 1934. (b) Both Mr. C. G. Alcorn, who was attorney for the Sterling Co. at the time of the transfer, and Mr. J. W. S. McArthur admitted in evidence that Mr. McArthur fixed the price to be paid, Mr. Alcorn merely carrying out his instructions, while, as previously stated, Mr. K. C. Aekins, the remaining director, has informed us that he knew nothing of the transaction. The following is extracted from the transcript of evidence before the Royal Commission in Sydney on 4th September, 1934, during examination of Mr. C. G. Alcorn. (Mr. Fuller appeared before the Royal Commission representing the Investment Executive Trust and other companies.) (Dr. Louat appeared for the Sterling Co. and other companies.) 7600. Commissioner. —" Yesterday afternoon Mr. Alcorn admitted that he knew nothing whatever about these transactions, and his actions were what I would term dictated actions." 7601. Mr. Fuller. —"With all respect, your Honour, I do not think that witness went so far as to admit that." 7602. Commissioner. —" I suggest(ed) to him that he was a puppet or marionette and that he moved as the strings were pulled by somebody else. He agreed to that." 7603. Dr. Louat.—" That was only in respect of the transaction to which reference was being made." _ jj 7604. Commissioner. —It was in respect of all the companies concerned. 7605. Mr. C. G. Alcorn. —•" My point was that these things were controlled by the Trust." 7606. Commissioner. —" Your ultimate statement was that ' they were all controlled by McArthur ? ' " Mr. C. G. Alcorn.—" Oh, yes." Similar evidence was given by Mr. Alcorn on 3rd September, 1934, and this is quoted in Section 8 (B) of this Report.

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