Another Chapter

On Hamac

By a Staff Reporter

The extraordinary story of Hamac Holdings Limited, of Papua and New Guinea (for full details see “PIM” November, 1959) was ad vanced a further step in Port Moresby on March 22, when an attempt was made to sell, by public auction, Ela Services Ltd.—one of the companies of the Hamac group. ) r!ERE was no sale at auction, but it was reported then that “private negotiations” were in progress.

On April 10, the Territory’s Supreme Court was still dealing with an application for the removal of the order for the liquidation of Hamac, issued by the Court last year.

The story begins several years ago, when Mr. F. K. McEachern (then, and still, a highly-respected insurance broker of Sydney) entered into alliance with Harvey Tripder Ltd., of London, to handle Lloyd’s Insurance in NSW, and formed Harvey Trinder (NSW) Ltd.

The latter concern prospered.

Eventually Mr. McEachern and his son, Mr. Leonard F. McEachern, were at the head of a big Sydney company and held 49 per cent, of issued shares.

After World War 11, Harvey Trinder extended operations to Papua-New Guinea, registered as a local company, and again prospered—mostly under the per son a 1 direction of Mr. L. F.

McEachern.

Mr. McEachern was interested in the formation in P-NG of trading and developmental companies. Pre sently, these were brought together in Hamac Holdings Limited. There were eight companies, concerned with motor-car selling and service, hotels, transport, planting, cattle farming. (See end of this article.) Because of the McEachern con nection, it had been supposed that the Hamac group was a Harvey Trinder enterprise. But when finance difficulties developed in the late ’Fifties, it was indicated that the various P-NG enterprises were the responsibility mostly of Mr. L. F.

McEachern.

Big Sums Involved

Although there was no legal link between Hamac and Harvey Trinder, the London and Sydney directors of the latter companies became con cerned with events in P-NG, and forced an investigation.

Published statements said that Hamac’s liabilities were between £400,000 and £500,000, of which

(Continued on p. 142)

£330,000 was owing to the Harvey Trinder companies.

The Messrs. McEachern (father and son) resigned from the Harvey Trinder companies, and the latter commenced a series of actions against them.

For example, on October 16, 1959, they appeared in court, on charges laid by Harvey Trinder interests, that they had improperly made use of Harvey Trinder funds, between mid-1956 and January, 1959. This case was listed for hearing for several months.

In January, 1960, Harvey Trinder (NSW) Ltd. moved for the liquidation of Hamac. The Messrs McEachern, in March, 1960, moved for the liquidation of Harvey Trinder (NSW). On April 1, 1960. the P-NG Supreme Court ordered Hamac into liquidation.

A few weeks later (in April) the fraud charges against the McEacherns were withdrawn, and there was a settlement described at the time as “satisfactory” to all parties.

New Co. is Formed

Details of the settlement were not published. But in a document filed in the P-NG Supreme Court on March 6, 1961, it is stated that, some time in 1960, debts totalling £325,170, owing to Harvey Trinder interests by the Hamac group of companies, were assigned to Mr. L. F.

McEachern; that the latter under took that those debts would be “de ferred” until “all other creditors”" have been paid in full; and that Papua and New Guinea Develop ment Corporation Limited was formed and registered in 1960 “with the object of taking over the Hamac group of companies.” The company (PNGDC) is regarded as favourable to Mr. L. F. McEachern’s interests.

It has been assumed that the Messrs, McEachern parted with übstantial share interest in Harvey frinder, as part of the settlement.

Viscount Lymington, eldest son if the Earl of Portsmouth, and now i resident of Australia (where he s closely associated with a group if companies headed by Latec finance Pty. Ltd.) became chair nan of the P-NG Development Cor joration.

Proceedings during the latter half if 1960 appeared to develop as a truggle for position between the ecured and the unsecured creditors if the Hamac group, and a fight ly P-NG Development Corporation 0 keep the companies “alive”. some of the unsecured creditors .rgued that liquidation would give hem a better chance of collecting heir money; while the PNGDC ried to persuade them to have nercy.

Eventually, both the Eriama and he Ela Services companies (in both 1 which cases the secured creditor s the National Bank) were forced o an auction sale. The Eriama sale ame on in February last, and 14.000 was bid for the stock by the

>Ngdc.

All these companies were put into iquidation early in 1960; so appar ntly the official liquidators were in harge of all proceedings.

Pressure on Ela Services Ltd.

Ela Services Ltd. (motor agencies nd service) is one of the Hamac roup; and the National Bank of mstralasia, Port Moresby, financed !la. Early in 1961, Ela owed the ank £16,000. The loan was secured.

The bank gave Ela until March 2 to repay the loan; otherwise the ssets of Ela Services Ltd. would e sold at auction. Efforts to raise 16.000 failed, and the auction took lace.

Among those present at the auction rere Viscount Lymington; Mr. laurice Cohen, of Melbourne, the orporation’s solicitor; other repre mtatives of the corporation; and tie Port Moresby Manager of the rational Bank.

Bidding rose from £28,000 to 34,000, for the company’s assets, ithout a sale resulting. A current, nconfirmed, report says the reserve rice was £35,000.

In March and early April the spresentatives in the Territory of NGDC were before the Supreme hurt with an application to re love the Hamac group from liqui ation; and, in the belief that, if le great majority of creditors of le companies concerned would ignify approval, the Court would rant the application, the PNGDC eople were working hard among le creditors, seeking such approval.

The matter was still before the ourt in mid-April.

The following shows the approxi late position of the Hamac com anies on March 6:

(I)—ANZ Bank. (2) and (3)—National Bank. (4)—Bank of NSW, £9,008; Mrs P. S. Stewart, £16,200. (s)—Bank of NSW, £15,611; South Pacific Brewery £5,000. (6)—ANZ Bank

Debts taken over by Mr. L. F.

Secured Reg’d. Co.

McEachern Debts £ £ Aroana Estates 2,508 6.676(1) Ela Services 89,102 15,385(2) Eriama Estates 94,955 8,598(3) Eriama Shipping 62,438 Hamac Holdings 3,480 184 Hotel Cecil .. 58,015 25,208(4) Morobe Hotels 11.934 20,611(5) Warrigela Pltns. 2.738 4,052(6) Totals .. 325,170 80.714