Former Bridgecorp managing director Rod Petricevic and ex-chief financial officer Rob Roest have been found guilty on all 18 charges brought against them by the Financial Markets Authority (FMA) with fellow director Peter Steigard found guilty on six of the ten charges he faced.
Both Petricevic and Roest have been remanded in custody, with Justice Geoffrey Venning reportedly saying a prison sentence was "inevitable" for Petricevic. Petricevic is to be sentenced on April 26 and Roest on May 18. Steigard has been remanded on bail until sentencing on May 18.
Justice Venning delivered his verdict today after a four month trial. See his verdicts here. And see his reasons for the verdicts here.
The FMA alleged the men made untrue statements in the investment statements and registered prospectuses of Bridgecorp and Bridgecorp Investments Ltd (BIL) dated December 21, 2006, and that they made further untrue statements when they signed prospectus extension certificates for Bridgecorp and BIL on March 30, 2007. Bridgecorp collapsed in July 2007. All three denied the charges.
Former Bridgecorp chairman Bruce Davidson was sentenced to nine months' home detention last October after changing his plea to guilty, and was ordered to pay NZ$500,000 in reparations and do 200 hours of community work. Gary Urwin, another former director, entered a guilty plea last November and will be sentenced on April 17.
In a brief statement the FMA said it welcomed the High Court’s verdicts, noting Justice Venning found Petricevic, Roest and Steigrad guilty on charges of breaching the Crimes Act 1961, the Companies Act 1993, and the Securities Act 1978. The FMA says charges under section 58 of the Securities Act carry a maximum penalty of five years imprisonment and fines of up to NZ$300,000. Charges under section 242 of the Crimes Act carry a maximum penalty of 10 years imprisonment, and charges under section 377 of the Companies Act carry a maximum penalty of five years imprisonment or fines of up to NZ$200,000.
The FMA separately filed civil proceedings, which were stayed pending the outcome of this criminal case.
Bridgecorp was tipped into receivership by trustee Covenant Trustee Company on July 2, 2007 with more than 14,000 secured debenture holders owed NZ$459 million. Thus far receiver PwC has returned them just 3.5 cents in the dollar and estimates investors' will get back no more than 10 cents in the dollar in total.
Petricevic and Roest also face separate charges from the Serious Fraud Office including the allegedly fraudulent acquisition of a luxury boat, the Medici, bought using Bridgecorp funds totaling NZ$1.8 million. The SFO alleges NZ$1.2 million of "dishonest payments" of Bridgecorp funds authorised by Petricevic to a business called ABb operated by Janita Wright, a personal acquaintance of Petricevic. These charges carry a maximum potential jail term of seven years and are scheduled to be heard in September.
(Updated with further detail, background and verdicts).
29 Comments
You are right Ivan, what reparation? I know the law is a big wheel and turns slowly, problem is that those that are directly affected by the law breaker don't get lawful reparation. To my way of thinking the victim, as of right should be placed at the front of the queue, unfortunately this rearly happens. As so often happens, what funds that are available are gobbled up leaving only crumbs for the victim, if they are lucky! Bah humbug, what justice, little wonder, many now feel so disenfranchised. I for one, am in favor of restorative justice, where the victim gets a fair go.
In some ways not even bust them open, a lot of perm damage would be done to his credibility / ability to work in such an area ever again just by showing such things as the trusts and the amounts....then see the voter tell the Pollies that this needs to change.
regards
Play nice you say? Please explain.
First. Check out this guy's history. He has had 3 trips to the well. And been bankrupted.
It could be argued that the news-media has been complicit in this saga in that it failed to question the ethics of this person who enjoyed a high-profile, and publish the results. There is also a reluctance to investigate and publish, in the public domain, for the world to see, the extent of his "trusts" and "trust assets" and $1.8 million motor yacht "medici" while at the same time seeking legal aid.
Here's a nice backgrounder on Mr P. -
http://www.listener.co.nz/commentary/when-we-spare-the-rod/I think Iconolast...Amanda was referring to Horace's cheery hello to the collective...as in (dumb asses )...still that reminds me...!
Here's a story for you Amanda or indeed anybody who isn't hung up about Easter (wink wink)
Two older women were having lunch together, And discussing the merits of cosmetic surgery. The first woman said, "I need to be honest with you, I'm getting a boob-job." The second woman responded, "Oh, that's nothing. I'm thinking of having my ass-hole bleached!" "Oh! Dear!" replied the first woman. "I just can't picture your husband as a blonde!" Happy break to all !!!!!
Speaking in general terms about these finance company failures, and not about this case. What I want to know is why some directors of these FC's get charged with 'criminal charges', while others get charged with 'civil charges'?
With criminal charges, if found gulity, criminal charges seem to mainly be community service possibily with a relatively small fine, or a smallish jail sentance.Also you have it on your police record, so there is that big black mark next to your name.
However civil charges, if found guilty, seem to only result in a fine. However if they don't have any personal assests themselves, eg. all their money is in a trust or partners name, they can't ever pay it. So civil charges seem to be better if you were a FC director and were found to be guilty.
I had heard that the reason why they were filing civil charges againest some of them, instead of criminal charges, was because there was more of a likelyhood they could recover more for the investors. Also some will be covered by insurance, which wouldn't apply if they were found to be 'criminally liable'. But as the receivers seem to be the main winners from finance company failures, due to the fees they charge, and the investor is at the bottom of the pack, does this really matter for investors? I don't say that the recievers don't deserve their money, as I am sure they work hard for it, and it isn't a pleasent experience. But I am sure many investors would rather see 'criminal charges' laid, for the satisfaction that if they were infact found guilty, it would be a black mark againest their name.
Anyone know why there hasn't been a Royal Commsion Enquiry into the NZ finance company industry failure, wiping out billions of NZ taxpayers savings?
Without that there is really nothing really offical that getsto the bottom of what really happened, and to prevent it from happening again.
Rob, this is the best thing I've seen on the finance company debacle - http://www.interest.co.nz/news/56209/finance-companies-collapsed-becaus…
And here is the select committee report - http://www.parliament.nz/NR/rdonlyres/57E84344-829E-45EB-9F99-E1F8E38DF…
Gareth you are so right. Now someone needs to look further into the exploding council rates debacle.
Steven H. while the appointment of selected expertise on committees or inquiries to justify preconceived outcomes is ..nothing new, the effrontery with which it is now practised and indeed the scale on which it is practised .... ...is sickening to the point of revulsion or revoltion.
Fairfax article draws our attention to agendas not in the best interests of the ratepayer/ tax payer /citizen....but where is the the option to redress...
Where do angry citizens form a collective that has any real meaning
There is a class system alive and well in N.Z.....it's not hiding...it's in your face...and it's saying ...what the hell are you gonna do about it.........tick another option box that doesn't really do it for you...?
They have a right to be smug........
They have no real barriers blocking their progress.
It need not be Steven H.....but it requires a will to follow through on building resistance.
The mechanics of apathy function at all levels.....I believe, it's that no one person has thought to build a platform to launch wider public objection on a meaningfull level...because everyone else wants it to be somebody else to champion their discontent for them... is the reason there is no...............
WE THE PEOPLE.
Shareholders Association chairman John Hawkins:
said he hoped a substantial order for reparations would follow the convictions, but the directors probably had most of their assets tied up in trusts and an order could be difficult to enforce.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=107…
It depends on the bravery of the judiciary.
It could be done if they wanted to.
New Zealand has shown a willingness in the past to venture into new territory ie Suffrage, the Vote for women, Social Security.
Why stop there.
In commercial law there exists the principle of "lifting the veil of incorporation" where in certain circumstances the courts are willing to "reach through" to the principals behind entities such as $100 companies and phoenix companies.
There are also significant statements still among the judiciary in support of a broader veil lifting approach in the interests of "justice".
Try reading this. It exists.
http://en.wikipedia.org/wiki/Piercing_the_corporate_veil
It could be done with trusts but would require bravery on the part of the judiciary.
Note the silence of the MSM and Fringe Media? And the Law-Makers
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