By Gareth Vaughan & BusinessDesk
Former Bridgecorp managing director Rod Petricevic has been jailed for 6 ½ years, in the longest jail term yet handed down to a finance company boss, for his role in misleading investors and knowingly making false statements in offer documents.
At the High Court in Auckland today, Judge Geoffrey Venning said he didn’t believe Petricevic showed true remorse for his actions in the collapse of the finance company, which failed in 2007 with about 14,500 investors owed NZ$459 million, the New Zealand Herald reported.
Earlier this month Petricevic was found guilty on all 18 counts of breaching the Securities Act, Crimes Act and Companies Act in a case brought by the Financial Markets Authority (FMA), and was held in custody. The Crimes Act charges carried a maximum sentence of 10 years imprisonment.
Crown prosecutor Brian Dickey asked for a starting point of eight years, while Petricevic’s counsel, Charles Cato, said six years was adequate.
In a brief statement FMA chief executive Sean Hughes said: “FMA welcomes this outcome and respects the Court’s decision. It’s notable that the sentence is at the higher end of the scale and reflects the Court’s view of Mr Petricevic’s conduct.”
The only other finance company boss to get a comparable jail sentence - so far- following the dozens of company collapses since 2006, is ex-National Finance 2000 director Trevor Allan Ludlow. Ludlow was sentenced to six years after being convicted of theft and false accounting. Ludlow has also since been banned indefinitely - in the first such move - from setting up, operating or working in the consumer finance industry.
Petricevic and Bridgecorp finance director Rob Roest also face separate charges from the Serious Fraud Office (SFO) 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.
Bridgecorp was tipped into receivership by trustee Covenant Trustee Company on July 2, 2007. Since then the receiver PwC has returned investors just 3.5 cents in the dollar, with the first repayment coming four years after Bridgecorp's collapse. All up, PwC estimates investors' will get back no more than 10 cents in the dollar.
Roest, who was convicted on all counts brought in the FMA trial along with Petricevic, will be sentenced on May 18 with Peter Steigrad, a non-executive director. Steigrad received bail and was convicted on six of 10 counts relating under the Securities Act.
On April 17, Bridgecorp director Gary Urwin, who pleaded guilty to 10 breaches of the Securities Act, was sentenced to two years in jail and has indicated he will appeal the sentence.
Former chairman Bruce Davidson, who also pleaded guilty, was sentenced last year to home detention, community service and paid NZ$500,000 in reparations.
(Update adds further detail including on SFO case and comparison with Ludlow's sentence, plus the FMA comment).
12 Comments
The Law Ivan, and the laws that govern applicable sentences, are woven by the lawmakers involved in the perversion of Justice as means of compensation or balance.
In the recent cases ,"The Law" itself has been deemed under indictment and so the odd sacrifial lamb had to be given up...as a means of placating the peasants.
The Laws governing these types of willfull crimes against investors is woefully inadequate in it's ability to discharge Justice for what is a very ..simple...clear ....to all...moral ethic.
You shall not steal...end of story.
While I fully agree with you in terms of other participants recieving H.D. with Com S.....I'm glad this is not 2006 , because Petriavic would have walked.
Small compensation I know....but the Law has been shown lacking, and in need of review.
Yeah, I agree with you Christoff. Sacrificial Lamb, yes. He p*ssed someone off in high places, if not this time, a prior time, possibly even for a second time. The news media and society collectively are complicit in this, because, tomorrow this will be yesterday's news. Something else will be the focus of the attention of the twittering class. Had the "powers that be" done the right job first time round over Euro National, and had the media kept it in the public's face this all may never have happened.
Unless the 6½ was a minimum sentence he will be out in about 3 years and applying for unemployment benefit plus National Super plus Accomodation Assistance etc etc.
Shock horror, not even Bubba's interested in his sorry old ar$$! That's what the world thinks of him.
And now they should bust his Trusts' wide open as they are clearly nothing but a sham that this convicted fraudster has deliberately used to protect the proceeds of his criminal offending.
Given the prolonged and serious economic damage that this individual has done to this country, Euro National, Bridgecorp, he had even worked at Securitbank too at one stage, and that went under as well due to some dodgy lending practices, although admittedly some years after he had left it, I think a much longer sentence would have been justified.
Why do I get the feeling that if this was the United States, he would have gotten 65 years, not 6.5, and he would have richly deserved every single one of them!
High Places. Protection. Vested Interests.
The moral of this story is. Society and main-stream-media and the fringe media have a responsibility to clamour for laws that enable class actions. If you remain silent, then you must forever remain silent. These types of events will happen again and again and again.
Mr Chaston. You have a responsibility to leave a legacy, be it ever so slight to the community in which you exist, and from which you obtain your livelihood.
That means keeping the issue of "class action law" alive and in the public gaze.
Memo to A-Rod. Learn from your mistakes Rod. When your next case comes up before the court in September. Do not. Repeat do not come the innocent. Do the contrition thing. Get down on your knees. Apologise. Show remorse. Be remorseful. Regret your sinful ways. Blubber. Cry. Go red in the face. Feign a heart-attack. Do a spastic. Whip yourself with a lash. Repent.
The reward? You will get off with home-detention.
So Rod P gets six and a half years. Makes us all feel better I guess.
One aspect of this I cannot abide is the way the media drag out these poor unfortunate investors in Bridgecorp who have lost their shirt, but without asking them some relevant questions. Like
- what professional advice did you receive?
- What proportion of your investment capital did you invest in Bridgecorp?
- Did you read the Investment Statement?
- Did you understand the security (or lack of it) of the investment?
- What knowledge did you have of Petricevic's past? (Euro-National etc)
- Did it occur to you that the finance company sector was in trouble, from 2005 on?
Diversification of investment assets does not mean choosing a dozen different investment companies.
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