Who's who at Dominion Finance fraud trial
Three men involved in the collapse of NZX-listed Dominion Finance Holdings have pleaded not guilty to fraud at Auckland High Court this morning.
The Serious Fraud Office has brought 12 counts of theft by a person in a special relationship against Dominion Finance boss Paul William Cropp (four counts), director Robert Barry Whale (5 counts) and a third company executive whose name is suppressed (3 counts).
The trio appeared in Auckland High Court today to defend the charges. The trial, before Justice Pamela Andrews alone, is expected to last for a month.
The SFO alleges the directors breached the financier's trust deeds when they took part in unauthorised related-party lending to the value of more than $20 million.
This related to allegedly stripping cash from Dominion Finance Holding's subsidiary North South Finance in favour of Dominion Finance Group, in order to stave off receivership.
A fourth director Terence Butler, who has cancer, was excused from the trial late last year.
In June, the three men face more criminal and civil charges, brought by the Financial Markets Authority after its separate investigation into Dominion's collapse.
Dominion Finance Group was placed in receivership in 2008, owing almost 6000 debenture holders $176.9 million. North South Finance was placed in receivership two years later, owing 3900 debenture holders $31 million.
Both companies were subsidiaries of NZX-listed Dominion FInance Holdings, which was placed in liquidation in 2009. They offered property and commercial loans.
Receivers have estimated recoveries of 10c-25c in the dollar for debenture holders in Dominion Finance Group and of 65c-70c in the dollar for those in North South Finance.
This morning, Crown prosecutor Brian Dickey is outlining the Crown's case against the men, who are sitting in the court alongside their Queen's counsels Paul Davison and John Billington.
In brief opening statements, Messers Davison and Billington said their clients had not intentionally breached Dominion's trust deed.
Mr Whale was a lawyer and partner in Auckland law firm Jones Young at the time the alleged fraud occurred.
As chief executive of Dominion Finance Holdings, Paul Cropp controlled the group's money, with authority to approve loans of up to $5 million without board approval.
The trial continues.