Feltex five back in court
Five former directors of Feltex Carpets are due in court this morning to defend an appeal for costs brought by the Ministry of Economic Development following last year's ground breaking criminal law suit.
Five former directors of Feltex Carpets are due in court this morning to defend an appeal for costs brought by the Ministry of Economic Development following last year’s ground breaking criminal law suit.
Former chairman Tim Saunders, chief executive Peter Thomas, and directors John Hagen, Peter Hunter and John Feeney last August were acquitted of charges brought under the Financial Reporting Act.
In her decision Judge Jan Doogue said the directors acted honestly and carefully at all times and were not guilty of the charges alleged by the ministry.
The charges centred on whether Feltex should have disclosed a breach of covenants in its half year report to December 31, 2005 and whether bank debt should have been categorised as current liabilities.
Judge Doogue ordered a $925,000 compensation package to the five, who had been seeking $1.36 million.
The MED is appealing the costs decision at the High Court in Auckland today.
In her decision, Judge Doogue said the ministry “failed to have proper regard to or draw the obvious conclusions from the information” provided by the accused directors. The charges related to the failure to disclose the company had breached conditions of a loan from ANZ Bank.
"I conclude that the prosecution chose to proceed to put the directors on trial without giving fair and adequate consideration to the steps the directors took to ensure that the standard would be complied with and were probably under a misapprehension that the directors were not entitled to rely on advice and assistance from management and professional advisers."
Duncan Bridgeman
Tue, 19 Apr 2011
Tue, 19 Apr 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Feltex five back in court
13989