One former director of collapsed finance company Five Star Finance has pleaded guilty in the Auckland District Court today to charges laid by the Serious Fraud Office.Marcus Arthur MacDonald, a former director of Five Star Consumer Finance Limited ("
One former director of collapsed finance company Five Star Finance has pleaded guilty in the Auckland District Court today to charges laid by the Serious Fraud Office.
Marcus Arthur MacDonald, a former director of Five Star Consumer Finance Limited ("Five Star") pleaded guilty to charges of theft by a person in a special relationship, which related to misuse of Five Star funds in breach of its Trust Deed requirements.
The Five Star group collapsed in 2007 owing investors more than $100 million.
Former Five Star directors Nicholas George Kirk and Anthony Walpole Bowden and Five Star manager Neill Alan Williams, have also been charged by the SFO with offences relating to the misuse of funds.
They are yet to be committed for trial.
In late August the SFO said it had laid over 100 charges against the former directors under the Crimes Act.
The charges related to related party lending that occurred between 2003 and 2007.
The loans in question had a total value of $50 million, a large proportion of which was irrecoverable, the SFO said.
The charges alleged that the four defendants:
- intentionally applied funds in breach of the company’s obligation under its trust deed; and/or
- dishonestly used documents with intent to obtain a benefit.
The offences each carry a maximum penalty of seven years imprisonment.
Commenting on McDonald’s guilty plea SFO chief executive Adam Feeley said: “This is the first result in relation to a major finance company collapse, and is hopefully indicative of things to come.”
McDonald was convicted and remanded to appear for sentencing on December 22, 2010, in conjunction with the sentencing of himself and other former directors of Five Star in relation to Securities Act charges brought by the National Enforcement Unit of the Ministry of Economic Development.
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