Former Capital + Merchant director Trevor Janes is retiring as chairman of Public Trust, amid legal squabbles over it being nominated as a replacement trustee of failed finance companies.
The state-owned trust last month sought legislation to prevent it having to pay legal bills and other costs if it is saddled with the trusteeship of Capital + Merchant, which collapsed in 2007 owing $167 million to 7500 investors.
That came after Perpetual Trust asked the High Court to appoint Public Trust as a replacement trustee for Capital + Merchant due to a conflict of interest – Perpetual is facing legal action from receivers over the trustee of the failed lender.
Mr Janes was a director of Capital + Merchant for 18 months until October 2006. He resigned from the company before its collapse and, unlike several of the finance company’s other directors, he was not charged with any wrongdoing.
Last year Mr Janes, who is also a director of Mighty River Power, was forced to step aside from any involvement in the decision to appoint Public Trust as supervisor of Capital + Merchant.
This morning Justice Minister Judith Collins today announced Auckland lawyer Sarah Roberts as the next chair of Public Trust.
Another board member, Sue McCormack, will be reappointed for a second term.
In April, NBR PRINT revealed unease from some government officials over Mr Janes’ appointment to the board of Accident Compensation Corporation.
His background at Capital + Merchant was flagged as a potential risk during the short-listing and interview process for ACC board spots up for grabs after a cleanout, following a series of embarrassing privacy breaches.
Ms Collins, who demanded the face-saving board clearout, endorsed Mr Janes’s $42,075-a-year appointment as deputy chairman, with her office telling NBR last September she had no concerns about Mr Janes’s involvement in the collapsed financier.
However, documents released under the Official Information Act revealed a flurry of behind-the-scenes phone calls and emails seeking iron-clad assurances from Mr Janes, the Serious Fraud Office and the Financial Markets Authority over his role.
Officials later sent Mr Janes copies of parliamentary questions asked by Labour list MP Andrew Little, noting the situation could get “quite political and terse”.
Mr Janes signed Capital + Merchant’s ill-fated 2006 prospectus but avoided the ensuing fallout, covered by NBR ONLINE here.
Five other directors – Neal Medhurts Nicholls, Wayne Leslie Douglas, Owen Tallentire, Colin Ryan and Robert Sutherland – faced various civil and criminal proceedings brought by the SFO and FMA, which led to prison sentences for Messrs Nicholls, Douglas and Tallentire and home detention for the others.