A former Bridgecorp employee today said work he did for the receivers led him to conclude that parts of the failed finance company's prospectus were incorrect or misleading.Kulasingam Indrakumar, Bridgecorp's internal audit and risk manager, was giving ev
A former Bridgecorp employee today said work he did for the receivers led him to conclude that parts of the failed finance company's prospectus were incorrect or misleading.
Kulasingam Indrakumar, Bridgecorp's internal audit and risk manager, was giving evidence in a depositions hearing in Auckland District Court.
Five Bridgecorp directors – Rod Petricevic, Rob Roest, Bruce Davidson, Gary Urwin and Peter Steigrad – each face 10 charges brought by the Securities Commission.
Steigard has already accepted that there is a prima facie case to answer.
After Bridgecorp collapsed in July 2007, owing 14,500 investors $460 million, Mr Indrakumar did analysis work for the receivers.
He concluded a number of statements in the prospectus and financial statement were incorrect or misleading.
Mr Indrakumar said that, after he joined the company in late 2005, he set about enhancing its risk management framework, getting his sources for best practice from the internet.
He also told of having concerns about loans not fitting the company's standard rules and expressed these in a written report.
The charges the defendants face relate to their roles in the December 2006 prospectus, which the Securities Commission alleges was distributed when Bridgecorp was already in freefall.
The commission said the situation was so bad that the company took out a loan at 30% interest to pay investors interest entitlements of 10-11%.
On the opening day of depositions yesterday, former investors services officer Katie Greengrass said her bosses told her to lie to investors who hadn't been paid out by saying there had been a "banking glitch" or computer problem.
Today's proceedings were taken up by cross-examination of Mr Indrakumar, who will return to the witness box tomorrow, and former Bridgecorp general counsel Joanna Wong.
