Capital + Merchant Finance director pleads guilty

Imprisoned Capital + Merchant Finance boss Owen Francis Tallentire has pleaded guilty to misleading investors ahead of a trial due to start next month.

Tallentire, 65, appeared in Auckland High Court today, where he pleaded guilty to three charges laid by the Financial Markets Authority under the Securities Act.

They included two charges of making an untrue statement in a registered prospectus and one of distributing advertisements which included an untrue statement.

Tallentire will be sentenced on March 15.

Now, only his fellow directors Neal Nicholls and Wayne Douglas – also in prison – will face trial on February 11.

Tallentire is serving a five-year prison sentence after he was found guilty on two fraud charges, brought by the Serious Fraud Office, at Auckland High Court last year.

Nicholls and Douglas, also found guilty, were sentenced to seven and a half year prison terms.

The fraud case was broken into two trials, with the first part dealing with so-called 'Hub' property deals in Palmerston North, of which the trio were acquitted.

But they were convicted in relation to the second part of the case relating to $28 million of related party transactions between 2004 and 2006.

Read more about the trial, described by the Crown Prosecutor as one of the most complicated finance company trials to date, here.

Capital + Merchant Finance owed $167.1 million to about 7500 investors when it was placed in receivership in November 2007.

Before Christmas, the Court of Appeal upheld the guilty verdicts and jail terms for Tallentire, Nicholls and Douglas.

Justices Terence Arnold, Rhys Harrison and Lyn Stevens dismissed the trio’s appeal against their conviction for theft by a person in a special relationship and upheld the jail terms.

"Simply put, this is theft on a grand scale," the judgment said.

Under the Securities Act, Tallentire’s conviction means he is banned from managing companies for five years.

FMA head of enforcement Belinda Moffat welcomed today’s guilty plea by Tallentire.

"This case is a further illustration of the importance of holding to account those who are responsible for untrue statements made to investors in offer documents, particularly in cases such as this where the conduct is particularly serious and the market impact is great," Ms Moffat says.

gbond@nbr.co.nz

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