216
Were you prepared to enter into that arrangement ? It was just
what we wanted.
You were to issue bonds on which a small amount was payable each month as long as those payments were kept up you
*
would not call in the loan ? That was the intention behind' the whole system, because that brought us in a revenue steadily, instead of a whole lump sum.
The point being to give shareholders 10 years to pay for their shares? Yes, and we would have constant money coming in.
Do you think a loan payable in that time is correctly described as a short term on call ? No, had the bonds been taken out they would not be described that way.
Was no advantage taken of this offer? By one man only.
Can you suggest any reason ? No, I have always tried to point out the advantage of it and they could not see it. Right from the start I have been at them all the time. I would certainly have done it myself.
Next item. Mortgage and Long Term Loans $266,630.00
that was
a cross-entry in your book ? I think you are right. It is difficult for me to make a definite statement on that point. I did not know it at the time this balance sheet was made out.
I say it was not a mortgage or long term loan. It is just a cross-entry? I say that if I made this myself I would have found it, but reasonable inspection would not have discovered that, because it is an error on both sides.
I am going to put it to you further - that this asset of $260,000 did not exist ? That is quite possible.
It was merely a cross-entry ? It was not deliberately done. The balance sheet was made out by the auditor. I subjected it to a reasonable inspection, but I don't think it is unreasonable to overlook a double entry; that should have been wiped off, but no reasonable inspection could have discovered it.
How can you bring yourself to describe an inter-branch transaction as a Mortgage and Long Term Loan it is a large item? It is not in amount of $1,000,000.00. I probably ought to have discovered it but I did not because that balance sheet exists in the Hong Kong branch and the Head Office.
By no possible stretch of imagination could they be described. as they are described it is not a mortgage? That is the way they appear in the Branch book.
An ordinary business man looking at this would assume that it was a perfectly good asset? Quite, it should not be there. I did not stop it.
Now, the next item. "Stocks, Shares and Other Investments". $484,831.80 $415,000.00 of that amount represents shares in the Instone Trading Co. ? Yes.
That was a private company?
Yes.
Dorothy
The two original shareholders were Mrs Brewer and P.C.Leo ?
Mr.Li Yuk Ting?
Yes.
The Memorandum and Articles of that Company were prepared by
25
No.
No comments yet.
Private notes are available after approval.