The Investment Savings and Insurance Association (ISI) expects to respond today or Monday to news that chief executive Vance Arkinstall is facing criminal and civil proceedings as a director of collapsed Dominion Finance and North South Finance.The Securi
The Investment Savings and Insurance Association (ISI) expects to respond today or Monday to news that chief executive Vance Arkinstall is facing criminal and civil proceedings as a director of collapsed Dominion Finance and North South Finance.
The Securities Commission said on Wednesday that it has laid criminal charges and issued civil proceedings against Dominion Finance Group and North South Finance directors Arkinstall, Richard Bettle, Terence Butler, Ann Butler, Paul Forsyth and Robert Barry Whale. The directors are expected to fight the charges.
A spokeswoman said ISI chairman Sean Carroll met Arkinstall yesterday morning and that the board was working through options off the back of the discussion.
"It is something the ISI is taking very seriously," the spokeswoman said.
Separately Grant Graham and Brendon Gibson of KordaMentha were yesterday appointed as receivers for North South Finance Ltd.
North South Finance had been operating under a moratorium but it was decided that continuing the moratorium under the direction of the directors in the light of the Securities Commission charges was inappropriate.
Covenant managing director Graham Miller acknowledged the constructive role that Bettle and Arkinstall had played in the conduct of the moratorium.
Dominion Finance Group went into receivership on September 9, 2008 owing $176.9 million to 5900 investors who are expected to get less than 25 percent of their investment back.
The commission alleges that Dominion Finance Group's offer documents and advertisements misled investors by misrepresenting the investment risks. North South Finance's offer documents and advertisements are alleged to have misled investors about related party transactions, liquidity and the company's overall financial position.
The criminal charges have a maximum penalty of five years in jail or up to $300,000 of fines. The charges were laid in the District Court at Auckland on June 4.
The commission applied on June 3 in the High Court at Auckland for declarations of civil liability and civil pecuniary penalty orders of up to $500,000 against each of the directors.
This is a first step towards getting compensation for investors who invested under the September 2007 prospectuses, as amended by the extension certificates on December 20, 2007.
