1929-12-10 — Page 10

10

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THE BREWER CASE OPENED.

FINANCIAL STANDING OF THE INSTONE BANK.

TUESDAY. DECEMBER 10, 1929.

SOVIET BUDGET.

INCREASE ON ORIGINAL ESTIMATE.

Moscow, Dec. 9. The саве against Mr. Noel The Central Executive Commit Instone Brewer, barrister-at-law, too has approved of the Budget, who is charged with offences under which provides for the expendi- the Porjury and Larceny Ordin-¡ture of 11,600 million roubles, un ancos in relation to the financial increase of 200 million roubles on affairs of the Instone Banking the original estimates.Reuter,

commenced Corporation, before Mr. A. W. G. H. Grantham

was

at the Central, Magistracy yester-show any business being done day afternoon,

thereafter, other than the acquiro-

In presenting the Crown case,ment of the facial value of Mrs. the Public Prosecutor (Mr. Somer-Brewer's shares as its capital.

set Fitzroy) sald three chargen

were involved, of which two had to do with perjury through the aling of a false Statutory Report to the Registrar of Companies and

Misleading Figures,

A balance sheet was prepared which was to have been presented

a third, with the presentation of before a meeting of the Directors

a balance sheet misleading in on the 8th July 1928, but to bo valida qopy should have been many material particulars.

circulated amongst shareholders t A Director of the Inatone Bank-seven days before the proposed ing Corporation, of which he was meeting. The Crown contended the President and the prime that the accused never complied mover in the establishment, the with this rule, and did not call for accused had the responsibility the minutes of the previous meet devolved on him of presenting and ing to be passed with an extraord- Aling the Statutory Report to the inary resolution at a subsequent Registrar. In this connexion, the meeting. The charge upon which Crown alleged that certain mis-the Crown was proceeding against statements were made by the the accused in this respect was accused when be represented the that on July 9, following the last total amount of monies received meeting. Brewer filed a

FROM SUNNY

IFOR

balance

in consideration of shares allotted sheet with the Registrar contain. to be much more than it really ing misleading figures in material

particulara.

допа,

With a nominal capital repre- Hented at a large figure, a most extraordinary procedure took place with regard to these shares when, forbidden under ita Articles of Ansociation to deal in its own shares, the Bank required its pros- pective stockholders to make up on paper what it lacked in cash dorivable from such shares, as the would following printed form show:

"I hereby make an application to the Inatone Banking Corpora- tion for a personal loan of $9,000, which sum I propose to use in payment of the balance outstanding on 100 Ordinary Shares applied for (or allotted to) me in my name, on which. the sum of $10 per share has been previously paid by me in cash. I agree that this loan, if accepted, shall be a lien on the the said shares and that in event of my essaying to transfer or hypothecate the said shares, it shall be forthwith repayable without demand."

Mr. Fitzroy detailed these par- ticulara which were entered in да accounta the balance sheet receivable, collateral and security loans, mortgages and long-term! loans stocks, shares and invest- ments, etc. all amounting to huge figures, but which from the Crown viewpoint were merely fictitious cross-entries an instanced in the case of "loans" to shareholders, It was their belief that the Bank' had no more than a few thousand dollars any one day in ita coffers, and that this mass of figures was intended to impress and misland the beholder.

The Crown's Duty.

1

It was not the Crown's case that the accused had defrauded any one of money. Rather it was their duty to show that a case had been made out against the necused on charges of committing perjury, statements, when he filed false and committing a further offence under the Larceny Ordinance when he published, or concurred fa the publishing, of 14 false Followed the signature of the balance-sheet. It then remained "borrower" and his acknowledg- for his Worship if he ruled that ment of the amount named, but, a case had been made out on those. explained Mr. Fitzroy, no hard charges to commit the accused, or cash passed hands. What happen- to discharge him if he thought ed then was that there was a the charges not substantiated.

Evidence was called, and Mr. number of cross-entries in the

Registrar of books which, while swelling the C. D. Melbourne, capital funds, also showed large Companies at the Supreme Court, assets receivable on "loan repay-testified to certain Company docu- ments and a balance sheet having able."

been filed by the Instone Banking Corporation.

Mr. G. Labrum, of Ye Olde Printerie, also stated that his arm at a material date received an order for 200 copies of a balance sheet handed in. This balance sheet, witness said, WAS sub- sequently subjected to alterations.

Mrs, Brewer's Responsibility. Mr. Fitzroy went on to refer to other "book" transactions with which the accused was directly interested and to a black of 4,800 shares, responsibility under which was incurred by Mrs. Brewer to the extent of $432,009. A person

Before the Court rose, Mr. E. burdened with such a huge in- Davidson, who represented the debtedness to the Bank said Mr. accused, applied for a reduction of Fitzroy, would have cause for bail. He said that the prosecu- considerable worry, but appar- tion had no objection to a reduc- ently not Mrs. Brewer, for she re- tion from 33.000 to $2,000 cash. mained in that blissful state in! Mr: Fitzroy intimated that he the following year. There would, had no objection and the bail was of course, be a way out if things accordingly reduced. - prospered, but they didn't and one wondered how she would bear op lo it.

There came a time when the balance sheet became due, and something had to be done.. What happened then was that a com- pany was formed under the style! of the Instone Trading Com- pany to acquire these shares and take over this indebtedness from Mrs. Brewer, The books of that trading Company did not

The case was adjourned till this afternoon.

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