Lombard case 'light years' from Nathans - lawyer

Lombard Finance's directors fulfilled their obligations and did consider an amended company prospectus carefully, Paul Davison QC told the Wellington High Court today.

Mr Davison was summing up his defence of Sir Douglas Graham and Lawrie Bryant, who along with Bill Jeffries and Lombard chief executive Michael Reeves, have pleaded not guilty to five Securities Act charges that they made false statements that related to the financial position of the company.

Lombard collapsed in 2008, owing 4400 investors about $127 million, an average of about $28,000 each.

The assertion in court yesterday by Crown prosecutor Colin Carruthers QC that the four men failed in their duty by not reading the document was refuted by Mr Davison, who told Justice Robert Dobson that evidence presented during the trial showed the men had to have gone through it carefully.

He took issue with Mr Carruthers' attempts to liken the Lombard situation to that of Nathans Finance, which also collapsed, resulting in the conviction last year of its directors for making misleading comments in its prospectus.

In Lombard's case, evidence showed the directors had a "reasonably lengthy discussion" about the document, which meant the Lombard situation was "light years" from the Nathans decision.

Mr Davison also questioned Mr Carruthers' statement, made during his summing up yesterday that the four men relied too heavily on what they were told about Lombard's financial situation by the company's senior management, without properly questioning advice they were provided with.

Evidence showed the directors scrutinised management actions and that their questioning of management who appeared before the board was "very, very intense", he said.

It was a deep questioning process, to the extent that the court had heard during the trial that management would not have wanted to go to a board meeting without being fully prepared, Mr Davison said.

The fairness of the Crown's approach also came under fire from Mr Davison.

He said Mr Carruthers had suggested an element of reconstruction of events by the directors to show themselves in a good light after the company collapsed.

However, that assertion was never put to the men by the Crown during questioning, he said, so they could not defend themselves against the accusation.

Mr Davison's summing up began at 9.30am and lasted all day.

Summing up from lawyers for Mr Jeffries and Mr Reeves will continue for the rest of the week.