1929-08-07 — Page 5

·

FIRE AT SHIUKWAN ·

STATION.

CATTLE "AND CHICKENS DESTROYED.

[FROM OUR OWN CORRESPONDENT.]

จ

CANTOX, Aug. €.

A big fire occurred at Shikwan Station. oo the Canton-Hankow Railway last Sunday evening at 7 o'clock, about 8 cows and some. 3,000 chickens and ducks being destroyed. The trucks with the live stock were all "ready to start. for Canton when a fre suddenly broke out in the poultry crateë. The flames spread rapidly, the town, being lit by the glare and the air filled with the lumes of the burning carcases. The station staff and the Police did all they could to quench the fire, but owing to the difficulty of getting

little could be done..

At this point a locomotive came upon the scene and drew the burn. ing trucks away from the station,

water,

stopping near a big water tower Here a supply of water, ordinarily used for filling boiler, was turned on the burning train. This proved

most effective and soon the are was

under control, but every animal in the trucks had already been killed. The damage to the station was slight.

TWO RAILWAY FATALITIES.

There were two stal railway accidents yesterday, Near Cha

Shan a man of about 30 years of age was run over And instantly killed by a train of the Canten Kowloon Railway. It appears that he was walking along the track and did not realise his danger till the enzine was almost on top of him when his efforts to save himself were unavailing.

The station master, in accordance with the rules of the line, scat for the relatives of the dead man to come to the Head Ofce where they would receive $10 compensation But it is not yet known whether they have done so.

cross the line instantly.

and

WAS

Was

THE HONG KONG DAILY PRESS, WEDNESDAY, AUGUST 7, 1929.

INSTONE BANK AFFAIRS.

PUBLIC EXAMINATION OF MR. INSTONE BREWER.

:

LENGTHY QUESTIONS ON THE BALANCE SHEETS.

A MISLEADING STATEMENT?

The Official You are only fencing: you know what I mean." Receiver used this phrase during the lengthy public examination yesterday of Mr Noel Instone Brewer in connection with; the winding-up of the Instone Banking Corporation.

The examination was conducted in the Supreme Court before the Chiel Justice (Sir Henry Gollan), who reproved Mr, Brewer several times for the way in which he answered questions. He waS told not to make speeches, and at another time not to use laug page of a certain kind.

Answering the Ocial Receiver | (Mr. E. L. Agassiz), Mr. Brewer said that he was a barrister-at-law, and prepared the memorandum and articles of association of the Instone Banking Corporation. He attended to all legal matters with the excep tion of litigation.

The Chinese Way,

The Official Receiver: The only difference in the typewritten balance sheet which you say you approved. and the printed one which you' say you disapproved, is the way in which the items give the company's capital 7-Yes.

Only $200,000 Cash? RIDER MAIN SERVICE

Asked to say whether the com.

pradore paid a sum of $9,000 shown

da due to the Company on January TWO HOURS DAILY FROM

1 this year, Mr. Brewer said thai he was cover asked for it. People were ready with their money be fore the emergency, but there was dicuity in getting them to pay after the crasD

TO-MORROW.

ferent times for each of the six

The Government announce that starting from to-morrow (Thuradas) The Ocial Receiver: Do you two-hour supply will be given agree that apart from loans, made, to shareholders by the Company on daily in, each of the rider main dis- promissory notes and on receipt tricts. The supply will be at dif- forms, the actual cash received by the Company in respect of shares never exceeded $200,000-The cashrider main districts, but the time- had to come in before making loans. table is not yet available.

I put it to you that you had no cash to make., loans -We had to have cash to make loans.

And you say that there were six lakhs of cash in June, 1027 -1 say that that sum of money came in

and we made loans. May I define

"cash i

The Official Receiver: You are only feacing; you know what I

mean.

To a question by His Lordship as to how many shares were applied for in the Company, the Official Receiver explained that the number was 28,000 according to the balance Mr. Brewer accepted, this sheep. money was sent in in respect of gure and said that no application those shares.

shares ?

The Official Receiver: You also You were present at the meet- His Lordship: How much money have some knowledge of financeing of directors which approved the was advanced on these promissory typewritten ope -Yes, we all sign-notes in order to pay for the and accounting 1-1 think 30.

You are responsible for the ac- counts as far as the Instone ing Corporation goes 7-Yes,

ed it.'

Mr. Brewer agreed that the first Bank-printed proof of the balance sheet was signed by the auditor alone. Mrs. Brewer made the auditor sign it. The balance sheet had been altered during his (Mr. Brewer's) absence.

And you have been connected with the bank from the time of its incep tion to the time it went into liquida-

on 7-Yes,

The Official Receiver: Why, was the alteration made Because the You were the moving spirit inauditor said that Chinese firms the formation of it --I took no part always ees out their capital in that

in the actual formation of the com-

way.

1

Mr. Brewer: We advanced 90 per cent. and took promissory notes. The security was cash. It is not my invention, but you will find it in any book of economics.

In the principal mains the length of the daily period of service will be increased by one hour from a a.m. to 7 p.m. daily,

According to the P.W. D. estimates this supply will involve a daily ex- penditure of 63 million gallons as against the 4 million gallons of the twelve-hour street fountain supply.

Yesterday morning's estimate showed that there were 1,284 million gallons in the Island Reservoirs. If the drought were to set in again as vigorously as last year there is on the Island enough water to last for 195 days or till near the end of February. But the present rains

some time and, in any case the har. bour' pipe line will be completed by are far more likely to go on for

the end of the year and a steady be available. supply from the Shing Mun should

Appeal to Landlords. Meanwhile an appeal is being made to landlords to see that taps are replaced, leaky joints etc.. remedied and that there shall be a minimum of loss through leakage. Answering other questions of the The continuance of the rider main Official Receiver, Mr. Brewer said supply will depend largely on how that the total amount received for landlords and tenants co-operate shares up to May 30, 1027, was with the authorities to stop wastage. 37,000. That was before the grant- The well known Chinese tendency The balance of cash to let a tap run rather than turn ng di loans.

"not my a hand at the end of May was it off, especially if

Do you consider that a sufficient 99,330. No cash was paid until the pidgin," will, it is hoped, be curbed reason for altering the capital 19th of that month when 35,000 was by the remembrance that the Gov- paid as security in bank notes. The erament may at any time return to following day there was a further the street fountain service. receipt of compradore's security amounting to $45,000. actual cash.

pany. The whole idea emanated from me but I did not solicit share-Learning of it after publication. I

saw no ground for recalling it. holders.

Did you, before filing the balance sheet, draw the attention of the directors to the alteration.1-Sure

Trustee Business.”

Trustee business was intended to be a prominent feature of its ac- tivities -Yes.

He agreed that in connection with the trustee business, the bank would act as financial advisers, and as highly respectable family solicitors.

The Offcial Receiver: Public con: fidence would be of vital necessity for your bank-It was existent at that date.

1

You were appointed a permanent director of the Instone Banking Corporation 1-Yes.

And continued to act as such until the company went into liquidation -Yes.

You were also appointed President under an agreement dated March 1, 1987-Yes. The company was in- corporated on February 22, 1927, with a registered office at 25, Des Vœux Road Central.

Mr. Li Tung the Auditor.

There is no record of that No. They were satisfied because they had, not signed it.

Do you agree that the statement as to capital in the printed balance sheet is absolutely misleading and incorrect 1-I do not agree. assured by the auditor that it is correct for a Chinese firm.

I am

the Ordinance 7-It is registered This was a British company under

under the Ordinance.

The whole of the books were in English except those of the branches at Canton and Shrekki-Yes.

Mr. Brewer said the amount of $2,813,960 shown in the balance sheet described the issued and sub-

scribed capital jointly. He agreed that one portion of the capital was never allotted and that the com- pany did not receive a cent of it.

The Oficial Receiver: In Noven ber, 1997, did you transfer $903,000 from issued capital to allotment suspense 7-Yes.

This was

Do you swear to that; you are on oath -I cannot swear to that; I know what I say.

Loans Totalling Over $800,000. The Official Receiver: During the month of June the books purported to show loans amounting to "over 8800,000.

I put it to you, you had not" the money to make these loans?

Mr. Brewer: We had. Mr. Agassiz: In promissory notes and receipts i

ہو

Mr. Brewer: That is the ultimate result. Mr. Brewer, and the Instone Trading Company.

*

There are still catstanding some. thing in the neighbourhood of four

lakha 1-Yes.

The Tanks.

The Water Control Office inform- ed our representative that all stand pipes, draw off taps, wooden covers and float indicators-anything in fact that can be stolen-are being removed from the tanks and care- fully stored, in" ease they should be needed again.

If the rains continue and Tytam Tuk, now 44 feet below overflow, is duly filled the tanks will prob ably be dismantled.

The Water Control Office is now winding up its affairs and everything with regard to the crisis is over- except footing the bill!

H.K. AMUSEMENTS, LTD.

PURCHASE VALUABLE KOWLOON SITE.

Explaining an item of 8432,000 in cluded among the six lakhs as ad- vanced to Mrs. Brewer, which it was suggested was done without any security, Mr. Brewer said that she was the trustee in respect of those shares and as in the case of the Almost at the same heur, oa ma-

others a loan was taken out to pay other part of the permanent- way,

i. He agreed that further loans to a child of about 12 years

An interesting purchase wa Why was that done 1-Because the shareholders amounting to $142,000 At the statutory meeting held on applicances were doubtful. Sub-were made in July, 1827.

made at yesterday's sale of Crown similarly run ever, near Wong Sha August 16, 1927, Mr. Li Tung was sequently some became good. The Official Receiver: The loan lands, the Hong Kong Amusements, Station. She was attempting to proposed as auditor He, Mr.

One person had a thousand shares of 7 lakhs appears as a good asset 1 Ltd., buying for 8103,000 a valuable

site killed Brewer only knew that Mr. Li forfeited for non-payment. Do you Yes.

in Kowloon, Described as Audited for fifteen companies.

consider that good I did not con-

Kowloon Inland Lot No. 208, it is The Official Receiver. What did sider any of them good. That is

at the junction of Nathan Road you think of this qualification? why they were transferred.

and Kaneu Street, its area being My first conclusion was that be was

19,000 square feet. only qualified to audit Chinese books. My second conclusion was that on reading the Ordinance re- there. ferting to auditing "it was not suf

How the Chinese Set Out Capital. ficiently clear for me to upset a fait

The Rempli. He took no steps to alter Is it misleading -No. the position.

balance sheet was only circulated Don't you think that as your among Chinese, and I understood Mr. Wu Tze Hai says that Marcompany worked with English books they set out their, capital in that sha! Li Tsai Hsin, who is still stay- except at the branches, it would manner. ing at Tangahan, has decided to have been wiser to have had the

books audited by a European firm come to Shanghai shortly.

I certainly do and I arranged the Another report. anys that Marshal auditing with Messrs. Lowe, Bing Li has sert agents to Shanghai to ham & Matthews. arrange for a residence.

MARSHAL LI TSAI HSIN.

(Wah Te Yet Pan

SHANGHAI, Aug. 6.

WRECK OF THE LOK SUN.

COURT OF INQUIRY ON

FRIDAY.

Do you think they properly ap peared in the balance sheet No, but I did not think there was a lie

It would have misled me. The Official Receiver:

Do you let your Chinese auditor do what he likes with the balance sheet No. I was away,

If they were good debts why did you not collect them I tried my best to collect and I did collect

some.

Interviewed by our representa tive, Mr. Lo Kan, one of the Direc- tors of Hong Kong Amusements, Insignificant items 1-Absolutely. Ltd., said that at present he could You were in increasing need of say nothing as to what they were money from day to day since Julyikely to do with the site. They fast year, and the need was so great hoped, however, to make a state- that you had no money to meet ment in the course of a day or solicitors fees in connection with two. the action which was before the

Court recently, and you practically consented to judgment 1-Yes.

Answering other questions Mr.

"

The Official Receiver suggested He agreed that an amount of Brewer explained that the transfer that the balance sheet was absolute. Absence of Working Capital.

$1,490,950 was given in the printed of shares of his wife, Mrs. Dorothyly misleading as regards assets and Brewer, was to enable the Instone liabilities in that it concealed the sheet under uncalled capital as a The Official Receiver: One of the perfectly good asset. He believed Trading Company to carry on an lack of working capital. A man of import and export business in con- ordinary intelligence would conclude main causes of the company's that the item included 90 per cent. failure was an absence of working of the shares which had not been junction with the Bank. This Com- by looking at it that a large amount.

pany did not start business, but had of business was being done. capital-I entirely disagree. The allotted. company never failed. We were With regard to an item $10,000 it not been for the closing of the full and to let the shareholders said Mr. Lim Joo Sin bought some money. He agreed that this transfer prepared to pay the creditors in caab at Singapore, Mr. Brewer Bank it would have made a lot of

was backed by promissory notes. receive a settlement amounting to shares, paid for them and the money was handed to Mr. Leung Si Ki,

Turning to the assets shown in 75 cents in the dollar. That is not failure, though it is a reverse. the bank's agent at Singapore, who the balance sheet, the Official Be You were never short of working held them for expenses that would ceiver asked if anyone would deduce

accrue in opening a

from it that the Shekki premises Singapore capital-I would not any that.

in fact, mortgaged for The Official Receiver: Why was branch. That man was, however,

wers,

Only Bonds and Trustee Business.

Mr. Brewer said that the Bank refused current, accounts and de- posita as they favoured only bonda and trustee business. He did not agree that the balance sheet was misleading, except for an entry of $260,000 which should not have been

A Court of Inquiry will be held it necessary at a directors' meeting liable for that amount, and would $150,000, Mr. Brewer replied that shown as it was an inter-branch

Office, on Friday morning at 10.30 a.m. to investigate the circum stances of the stranding of the s.8. Lok Sun which went aground during

the early hours of Sunday, July

14, on Samus Island.

tion of going into voluntary liquids

it appeared in the balance sheet item. He was assured by the at the Marine Court, the Harbour on March 10, 1928, to pass a resolt have repaid the money as 2000 88

as specialty debt" which was auditor who prepared the balance The Official Receiver: Did the tion saying that the directors must the branch was opened.. pay for their shares -We were The balance was never opened be the usual legal term used by the sheet that everything was in order.

Pressed further, Mr. wanting to open two other branches. cause the Government would not Registrar.

grant a licence. "Some expense had Brewer agreed that to him the auditor run your Company-I ac- been incurred, but not more than a printed balance sheet did not dia- cept full responsibility, but I did not make this balance sheet. I ad- close a mortgage. few hundred dollars. He did not

mit it may be misleading to aa The Hong Kong Premises.

Englishman, but the auditor assured Questioned regarding the premises me that it was the customary way in Hong Kong purchased from one of preparing it. There was no lie.

Following observations by Hi of the directors for 8240,000, Mr. Brewer said that he ascertained Lordship as to the difference be- later that the seller made $35,000 tween something which is mislead- profit on the deal. An offer to buying and something which is a lie, Dealing with promissory notes the property from the Company for the Official Receiver asked Mr. Brewer why he did not use the or given to shareholders to the value #250,000 was later received, but re-

Mr. fused. approximately $31,000,

In the commercial sense, dinary method of calling up money of

as required. Mr. Brewer replied Agassiz naked if cash passed, and therefore, the property was then Mr. Brewer answered in the affirma worth more than it was bought for, that although there were applica although the value fell later. tions for two million dollars, he was tive.

After questioning Mr. Brewer on satisfied to carry on with $200,000 the amount of current accounts and as he did not wish to have too much: fixed deposits, the Official Receiver money. He thought money would put it to Mr. Brewer that the come in freely, but he was wiser balance sheet showed the capital after the event. subscribed as $2,600,000 which was not the case.

Alterations in Balance Sheet. On September 25, 1828, the ques-

believe it was $4,000. He had not received a cent from Mr. Leung, tion was discussed 1-Yes.'

Less than three months after the bat that was not his (Mr. Brewer's) The Harbour Master, the Hou. publication of the balance sheet fault. It was still in the hands of the company, Mr. Leung being the Commander G. F. Hole, R.N. (re- Yes.. tired), will act as President of the The first report and balance agent,

Mr. Brewer Reproved. will be sheet covered a period up to April Court and the assessors

30, 1928, and was presented for Lieut. Comdr, L. G. Haddington filing on July 9, 1928 (H.M.S. Tamar), Captain Róbert Hill (s.s. Phemium), Capt. Arthur Hall (8.5. Telemachus) and Capt. G. Andoe (sa. Tinhow).

The ss, Lok. Sun was command.

ed by Capt Herbert Robert Edmondson at the time of the stranding and Mr. Frederick Smith was Chief Officer.

Mr. Brewer explained that the document as printed was altered during his absence. He had op proved the typewritten draft, and had led the printed copy although alterations had been made.

The Chief Justice: Was it not a serious thing to sign. a document you know to be inaccurate and file it It would be serious if I knew it to be inaccurate in a commercial

sensa.

Mr. Agassiz suggested that cer- tain entries were cross-entries.

Mr. Brewer: They are not. That is a lie,

His Lordship: Don't use language of that kind here.

Mr.. Brower: I withdraw the re- mark, my lord.

"(Continued an nest Column.)..

This closed the Official Receiver's questions and the Court adjourned fintil 10.30 a.m. to-day.

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Classified List of Manufacturers

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Hong Kong Daily Press Office.