1.—4

6

items and the company paying them, and then these having to be refunded by order of the auditor, is not right, and when it happened once Mr. Cook and his servants should have seen that it did not happen again, otherwise it would subject them to grave suspicion. This happened more than once. Notwithstanding Mr. Cook blaming Mr. Hoisted in the matter; the minutebooks of the company show that he himself is to blame, as he as director at directors' meetings passed his brokerage account as correct and signed the same, and in some cases ordered payment; in others he had collected application-money on the shares sold, and he simply retained the brokerage, paying the balance over to the company. This trouble is to be attributed to Mr. Cook being promoter, broker, director, and secretary all in one. (15.) " Shareholders voting and directors acting when their calls were unpaid": Mr. Cook elicited from Mr. Somerville that he (Mr. Somerville) had voted and also acted as director while his application-money was unpaid, and he had received director's fees, and the accounts of his firm had also been paid, while he still owed money for-calls. What happened in Mr. Somerville's case happened in a much worse form in regard to Mr. Cook, as will be seen by looking at the comparative table of Mr. Cook's dealings with the seven companies whose books your Committee have, for in all of these companies he had not even paid his allotment-money till it was about nine months, on the average, overdue, and yet during this time he had acted as director, attended meetings and voted, and even passed some of his own brokerage accounts for payment, as well as his secretary's salary. He had actually passed large sums for payment to himself, and had received them while he himself was still owing to the company large sums of money. The law certainly requires amending in the direction of depriving a shareholder of the right to vote or act as director until he has paid his allotment-money. (16.) " Improper auditing " : The Committee desire to point out that in some cases brokerage was charged by Messrs. Cook and Gray on application-money when such application-money was never paid ; the matter escaped the attention of the auditors. Generally. VI. To each and all of the above charges Mr. Cook's chief answer was to point out to the Committee the very large number of contributing shares he had taken up in each of these companies for himself and Mrs. Cook. That he must have taken them up purely as a mining venture, and not for speculative purposes only, he said, was proved by the fact that he did not sell his shares, and that he stood to lose double the amount that the others did if the companies failed. This position was often during the inquiry impressed upon us by Mr. Cook, and it would have been a very strong argument indeed of Mr. Cook's bona fides if it was fully borne out,.but it does not stand close criticism, for Mr. Cook has paid for his and Mrs. Cook's shares in the seven companies whose books were put in evidence the sum of £2,140, but Messrs. Cook and Gray received £1,841 13s. 9d. back from the companies, as shown by the following table : —

Comparative Table.

Company. Paid by Mr. look to Companies. Date. Amount. Total. Received 1 iy Cook and Gray from Companies. Date. Amount. Tota . Wicklow Paid Application Allotment .. 9 May, 1890 22 Feb., 1891 £ s. d. 50 0 0 50 0 0 £ s. d. By Brokerage .. Secretary's salary Director's fees 21 May, 1900 \ e s. a. >139 0 0 i 87 10 0 £ a. d. !. Ngahere Subsequent shares Paid Application Allotment .. 15 0 0 50 0 0 50 0 0 115 0 0 21 0 0 247 10 0 23 April, 1900 6 Mar., 1901 By Brokerage .. Secretary's salary Director's fees 24 Sept., 1900 175 0 0 87 10 0 I. Lees Ferry .. No calls made .. 50 0 0 50 0 0 100 0 0 By Brokerage .. Secretary's salary Director's fees 15 June, 1900 3 18 9 150 0 0 100 0 0 266 8 9 Paid Application Allotment .. 15 June, 1900 22 Feb., 1901 b. Tucker Flat No calls made .. 65 0 0 65 0 0 100 0 0 By Brokerage .. Secretary 's salary Director's fees 19 May, 1900 21 0 0 271 0 0 Paid Application Allotment .. 19 May, 1900 About 25 Jan., 1901 150 0 0 56 15 0 i. No Town No. 2 Subsequent calls paid Paid Application Allotment .. 65 0 0 195 0 0 By Brokerage .. Secretary's salary Director's fees 8 May, 1900 21 0 0 185 0 0 87 10 0 227 15 0 8 May, 1900 22 Feb., 1901 50 0 0 j 50 0 0 !. Golden Grey Calls subsequently 500 0 0 50 0 0 50 0 0 600 0 0 By Brokerage .. Secretary's salary Director's fees 25 May, 1900 7 0 0 139 0 0 87 10 0 279 10 0 Paid Application Allotment .. 21 May, 1900 25 Feb., 1901 '.Ross Day Dawn No calls made .. 100 0 0 21 0 0 175 0 0 106 0 0 247 10 0 Paid Application Allotment .. 27 Mar., 1900 27 Dec, 1900 50 0 0 50 0 0 By Brokerage .. Secretary's salary Director's fees 27 Mar., 1900 Some calls paid with allotment 830 0 0 930 0 0 21 0 0 302 0 0 J Total .. Total .. £1,841 13 9 £2,140 0 0