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Don't you think it a serious matter to file a document that you know to be inaccurate ? It would be a serious matter if I had filed it knowing it to be inaccurate in a
commercial sense, but I maintain it is not inaccurate in a commercial sense because I relied on the statement of the Auditor, as I have a right to.
The only difference in the typewritten balance sheet which you say you approved and the balance sheet which you now say you disapprove - the only difference is as regards the way in which the items dealing with the Company's capital had been stated ? Correct.
That is the only difference in the whole balance sheet ? Capital, and also some debtors are set out more clearly.
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Capital Accounts Receivable and Uncalled Capital.
Do you approve of that? I maintain there were no errors which would be discernable by a reasonable man. There was not a word of lie in the printed balance sheet. There was nothing
I could pick out but I did not publish it.
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You were present at the meeting of directors which approved the balance sheet of June 18th, 1928. That is the typewritten document ? Yes, we all signed it at that time.
The general meeting at which the balance sheet was approved was on 18th June, 1928 it says "President was away unwell" ? Yes, that was when I was away.
An adjourned meeting was held on 21st July at which you were present ? Yes.
At that adjourned general meeting at which you were present, a dividend of 10% was declared ? Yes. May I ask you to
put in the signed printed balance sheet, signed by the auditor and by no one else ?
Yes, certainly. This I take it was the first proof ? Yes.
This is signed by the auditor Mr.L1 Tung where the alterat ion in capital has been made ? Yes.
And agreed to by the auditor on whom you say you relied ? The auditor agreed to that and signed it. In fact, he initiated it. My wife made him sign this because he altered the balance sheet in my absence. My wife who was in charge during my absence made the auditor sign it. (Ex.NIB 6)
Why was the alteration made in the capital ? Mr.Li Tung said that Chinese firms always put their capital in that way. He told me that when I came back. He said it was the custom.
Did you consider that as sufficient reason for altering the capital because Chinese firms always did it that way?
No, had I known of the alteration before publication, I would
have stopped it. Seeing it was published I could not withdraw it, and knowing it to be customary, I knew it could not be misleading anymore than mortgages are misleading.
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Did you raise any protest recorded in the Minute book against
this new form of balance sheet which you say the auditor made ? No, because I had his signature
Is there any protest in the books as to this unauthorised alteration did you protest ? To whom?
To anybody? To the auditor.
7.
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