Executives from 2 failed New Zealand finance companies are being charged with criminal offenses.
Maria Slade and The New Zealand Herald report in Criminal charges for 9 finance firm chiefs that the Securities Commission and the Registrar of Companies allege:
…Bridgecorp staff were told to lie to investors who complained about late interest payments by blaming a bank error or computer glitch.
It says the finance company was so short of money that in April 2007, three months before it collapsed, it had only $45,000 available to meet $2 million in payments due to investors.
The Securities Commission alleges the Nathans Finance directors signed untrue statements saying the company had no bad debts, had adequate liquidity, that its lending was diversified, and that it made loans in accordance with robust policies.
It says they misled investors over Nathans’ lending to its parent company, vending machine operator VTL which is also now in receivership.
Names and Potential Outcomes
Bridgecorp: Former executive director Rod Petricevic and director Rob Roest already face five criminal charges, and now also face civil proceedings. Chairman Bruce Davidson and non-executive directors Gary Urwin and Peter Steigrad are now charged alongside Petricevic and Roest. Bridgecorp owes $459 million to 14,300 investors; they could get back as little as 13c in the dollar. Bridgecorp Investments owes $29 million which is unlikely to be recovered.
Nathans Finance: Directors John Hotchin, Donald Young and Kenneth Moses face criminal and civil proceedings. A fourth Nathans director believed to be living in Australia is also charged. Nathans Finance owes $174 million to 7000 investors; less than 10 per cent is expected to be recovered.
Penalties: Up to five years in jail or fines of up to $300,000 if convicted of criminal charges. $500,000 each in compensation payments.
This is a follow up to my May posting called 90 yr old faces losing house over Blue Chip:
Mrs. Gwendoline Harrison, a New Zealand pensioner was served with legal papers at her bedside this week. It involves the collection of a $300,000 mortgage that the franchise company, Blue Chip, sold her.
Bridgecorp directors Rod Petricevic (left) and Rob Roest are in the photo above, care of Richard Robinson.