BUSINESSDESK: The Lombard decision took a long time to read, a lot longer than it took Sir Douglas Graham to walk through the media scrum outside the Wellington High Court, down Lambton Quay and away from what must have been the most humiliating hour of his life.
To add insult to injury, a gratuitous shoulder barge for one of his supporters from a TVNZ cameraman was all that was needed to cap an awful day.
The length of the decision was important, because there are so many factors to weigh in the appropriate sentencing of any group of directors associated with the collapse of finance companies in the late 2000s.
One day, a quick history should be written of the varying levels of sentences meted out to the various offenders. For the moment, however, the tangle of legal actions involving so many finance company directors means the relative degrees of offending cannot yet all be judged.
Hanover Finance’s Mark Hotchin has yet to face any allegations, although it’s known only civil charges will be laid, while verdicts are still awaited in the case Rod Petricevic and Bridgecorp directors.
What we do know is that the sentences handed down today by Justice Robert Dobson are intended as a lesser penalty than those imposed on the former Bridgecorp chairman, Bruce Davidson.
For the non-executive directors of Lombard, it’s also a lesser penalty than the directors of Nathan’s Finance, whom the court found were inept and left false offer documents in circulation for more than twice as long as Lombard did in early 2008.
Justice Dobson was also very careful to say he believed Sir Douglas, Bill Jeffries and Lawrie Bryant had worked hard to discharge their duties even as they made misjudgements that saw Lombard reissue a prospectus without referring to liquidity concerns that tipped it into receivership in early April 2008.
It is that 101 day period in which the investment documents were in the market and wrong that today’s sentences relate to.
Outside the court, Lombard investor Paul Wah – whose deeply critical comments of the Lombard directors were seized on by media when the guilty verdicts were first released earlier this month – was more generous than might have been expected, saying there was “no point in jailing old men”.
If any proof were needed that Sir Douglas, in particular, has paid a very heavy price for setting his reputation against a company that failed and lost $127 million, it was the coverage his verdict received. While some may disagree, Justice Dobson was right to suggest no prison term could outweigh the damage to his once good name.
Now for the civil actions…