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"company in respect of all the shares allotted:" (section 66(3), (a) and (b)). The statutory report
must also be filed with the Registrar of Companies
forthwith after its issue, (section 66(5)).
I attach a copy (enclosure "A") of the count in the indictment, upon which the trial proceeded. Mr.Brewer was a director of the Instone Banking Corporation, Limited, and on the 16th August, 1927, filed its statutory report, of which I also enclose a copy
(enclosure"B"). Mr.Brewer certified in the statutory
report that the total amount of cash received by the company in respect of shares issued wholly for cash was
$876,750.
The facts on which this statutory report was
based were not substantially in dispute at the trial. Less than ten per cent of the abɔve sum was in fact
received in to the bank. Mr.S.H.Ross, Chartered Accountant, certified that the amount received by the company in "Cash",
in ordinary parlance, on this account was $48,650.00.
The balance of the sum mentioned in the statutory report was made up of nominal advances (without security) by the
bank to the allottees of the shares and parallel credits
in favour of the allottees in the books of the bank.
These nominal loans included a figure, $432,000, to Mrs. Brewer, (practically unsupported by security
unenforceable guarantee was mentioned in evidence).
A
an
A large sum of $800,000 odd was therefore returned in the statutory report as "cash received by the company, whereas
in fact this accumulation was merely a series of book entries tabulating in substantial transactions, with the
object, as it would appear, of inflating the apparent
capital of the company and representing for the bank a
high financial stability.