Dominion Finance trio sentenced
Dominion Finance chairman Richard (Rick) Bettle and directors Vance Arkinstall and Paul Forsyth have all been sentenced to home detention for failing in their role as directors of the collapsed financier.
The company, which offered property and commercial loans, was placed in receivership in 2008 owing almost 6000 debenture holders $176.9 million. Subsidiary North South Finance was placed in receivership soon after, owing 3900 debenture holders $31 million.
At Auckland High Court today, Bettle was sentenced by Justice Sarah Katz to 10 months home detention, do 200 hours community work and ordered to pay $90,000 in reparation.
Arkinstall was also sentenced to 10 months home detention and do 200 hours community work.
Forsyth was ordered to serve 11 months home detention, 200 hours community work and ordered to pay $50,000 in reparation.
All three pleaded guilty and were convicted on Securities Act charges of signing off misleading offer documents to investors in Dominion and its subsidiary North South Finance.
The criminal charges brought by the Financial Markets Authority carry a maximum penalty of five years’ imprisonment or fines of up to $300,000.
Bettle, a former chairman of law firm Kensington Swan, and Arkinstall applied for discharge without conviction in June, but then changed their minds and joined Forsyth in pleading guilty ahead of trial.
The charges were the same as fellow directors Ann Butler and Robert Whale earlier pleaded guilty to and are now serving home detention sentences of nine months and 12 months, respectively.
Butler’s husband Terry Butler, also a director, avoided the trial because he had cancer. He died on March 28.
Bettle stepped down as chairman and director of lines company Powerco and as director of NZX-listed Diligent Board Member Services before pleading guilty in June.
Arkinstall quit his role as front man for the Investment Savings and Insurance Association in 2010 as he prepared to fight the criminal charges.
Dominion Finance Group, which offered property and commercial loans, was placed in receivership in 2008 owing almost 6000 debenture holders $176.9 million. North South Finance was placed in receivership soon after, owing 3900 debenture holders $31 million.
Both companies were subsidiaries of NZX-listed Dominion Finance Holdings which was placed in liquidation in 2009.
"Betrayal of trust"
FMA chief executive Sean Hughes says the men failed to perform their role as directors and that they did not take the steps required to ensure that they were aware of the true position of the company.
“Investors, many of them elderly, lost significant amounts of money and the effect of this has put a great deal of financial and emotional strain on them. They did not deserve this betrayal of trust,” Mr Hughes says.
“What this case highlights, like the many other finance company cases, is the responsibility of directors to provide truthful, accurate and timely disclosure of material information to investors.”