CO129-535-5 N.I. Brewer- transcript of trial and evidence 1-1-1929 - 31-12-1931 — Page 193

Did you know that in fact by a regulation published in a Government Gazette on 19th July, 1920, Government Notification 392 that Mr.Li Tung

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it runs as follows :-

(The Government Notification was then read).

At the time Mr.Li Tung was appointed auditor did you know that his appointment had been made subject to that condition ? At the time I had no knowledge of his qualifications or his identity, except that I was informed that he audited 15 companies' books and was a suitable man.

You did not know ? Before the audit I investigated his qualifications. At the time of the statutory meeting I knew nothing of Mr. Li Tung except that his name was brought forward that he was declared to be the auditor of 15 companies.

Later, before he audited our books I investigated his qualifications. That was nearly a year later.

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When you investigated his qualifications what did you think of them ? I concluded as you did that he was entitled my first conclusion was that he was entitled only to audit Chinese books. My second conclusion was, on re-reading the Ordinance, that it was not sufficiently clear to justify my upsetting a fait accompli. The shareholders had already appointed him auditor and the Ordinance makes no provision for distinction between Chinese and English auditors whatever, and for the Registrar to purport to make such a distinction is ultra vires. Having these genuine doubts in my mind, I took no steps to alter the position as it stood.

Bo Bo on

Don't you think it would have been wiser to have an audit by a European firm ? I certainly do and if you notice so as I was empowered to dictate who should audit, Messrs Lowe Bingham and Matthews got the job.

You have seen Mr Li Tung - what do you think of his knowledge

He reads of English? His knowledge of English is poor. and writes excellently his spoken English is bad.

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Bad, is putting it mildly! The adjourned general meeting was held on the 21st July, 1928. At that meeting one of the resolutions was that Mr Li Tung be re-elected auditor for the coming year. That was after you had a year's experience of Mr.Li Tung. (Ex.NIB 1 shown to witness) ? Yes, quite correct. At that meeting you were content you acquiesced, to Mr.Li Tung's ro-appointment ? At that meeting I did not know some things which I know now. I had just come back you will notice.

You acquiesced to the re-appointment ?

Yes.

Do

I want to go on to when the Company had to liquidate. you agree with me that one of the main causes of the Company's failure was an absence of working capital ? I entirely disagree with you. At the time we handed over to the Official Receiver we had an agreement whereby creditors would be paid in full and the shareholders would receive a settlement of 75 cents in the dollar. That is not failure though it is a

reverse.

You say you were never at any time short of working capital ? I would not say that. No firm could ever say that.

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You were never short of capital We could always meet our obligations until Mrs. Jen See Chin failed to pay her debt on the 1st June, 1928.

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