Investors not lied to, Petricevic insists

Cross-examination of Bridgecorp managing director Rod Petricevic has begun at Auckland High Court, and lawyers for the Crown have wasted no time in testing his apparant ignorance of missed interest payments in the months leading up to Bridgecorp's collapse.

Yesterday, giving evidence in his defence on Financial Markets Authority charges, Mr Petricevic gave his account of the day he realised interest payments were delayed at the end of March 2007 (the end of the financial year) -- when it was alleged a 'computer glitch' was blamed.

He said he did not consider the payments, due to be paid on the last business day of March [30] 2007, as 'missed' as they were paid on the next working day - Monday April 2.

He also told the court he was not aware of a series of missed interest payments to Bridgecorp investors until he read about it in the newspaper - after the company fell into receivership in June 2007.

Robust questioning from Crown laywer Mr Warren Cathcart put that theory to the test this afternoon.

He asked Mr Petricevic to note presented at the the April 2007 meeting of Bridgecorp's executive committee, which Mr Petricevic chaired, that referred to the damaging effect to the company from the late payment fo interest and maturities.

"The late payment of interest on debentures and notes and repayment of maturities has done damage to us this month. The exact extent of which will become apparent during the month of April," the note to directors said.

Mr Petricevic told the court he did not believe the statement to be true, because the note was written by a junior employee and he believed he had it wrong.

"These were junior people. They were people who didn't understand in full what that payment covered."

Mr Petricevic yesterday said in evidence that believed at the time, and still believed, the April 2 payment was in accordance with the next banking day, so it was not a missed payment.

Mr Cathcart asked why Mr Petricevic had not taken steps to ensure the statement - that should have set off alarm bells - was incorrect.

Mr Cathgart: "Are you saying you read the plain language and asuumed the author was in error on a major issue?"

Mr Petricevic: "I did."

Mr Cathcart: "Did you take any steps to make sure?"

Mr Petricevic: "No, I did not and no one drew it to my attention."

Mr Petricievic said he was ignorant of a series of missed maturity payments from February 7 onwards in the year Bridgecorp collapsed until he read about it in the newspaper after Bridgecorp collapsed (in June 2007).

"What that newspaper article did for me was to cause me to make a call to my finance director Rob Roes and say, I didn't know about any missed payments in February and March, did you?"

Mr Petricevic said said he would have expected his finance dept to alert him to any missed payments.

"I was not involved in the day-to-day running of this business. I relied on various people to do their functions. I would have expected to have been told [by senior staff members] - none of which did."

Asked to identify a lie
Mr Petricevic told the court it was "absolutely" his view Bridgecorp investors were not to be lied to.

"There was no lying done on my part to any investors," said Mr Petricevic.

"Investors were number one."

However, he was hauled over the coals on that point when Mr Cathcart produced a letter from a Wellington-based investor, Mr W. J Fair, threatening action over the late March 2007 payment.

In his letter, Mr Fair said he was told by Bridgecorp's investment manager Chris Todd the delayed payment was due to a "computer processing error".

Mr Petricevic has previously denied the 'computer glitch' excuse was blamed.

The trial, before Justice Geoff Venning alone, continues and is expected to end late March.