Lombard decisions based on expert advice - former CEO
Lombard Finance's management went to great lengths to get independent, expert advice, its former chief executive says.
Lombard Finance's management went to great lengths to get independent, expert advice, its former chief executive says.
Michael Reeves, who read from a prepared statement when he gave evidence in the Wellington High Court yesterday afternoon, said not only did Lombard never respond to any regulatory authority without legal advice, but any document sent to an investor received the same treatment.
Whatever area that advice covered, be it legal, audit or accounting related, the advice was always followed, Mr Reeves said.
That advice did not come cheap, with the lawyers used costing between $600 and $700 an hour, he said, adding they were not run of the mill.
Mr Reeves and Lombard Finance directors Sir Douglas Graham, Bill Jeffries and Lawrence Bryant are on trial facing five charges laid under the Securities Act.
It is alleged that they made false statements that related to the financial position of the company. All four pleaded not guilty to the charges.
When it collapsed in 2008, Lombard owed 4400 investors about $127 million, an average of about $28,000 each.
Mr Reeves began his evidence by detailing his employment history, before going into how Lombard was created and how the company operated.
He said that while other finance companies failed in 2007, at the time he was confident Lombard would survive.
The case is proceeding.
Colin Williscroft
Wed, 07 Dec 2011
Wed, 07 Dec 2011
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Lombard decisions based on expert advice - former CEO
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