Lombard trial finally kicks off
UPDATED: The highly anticipated trial of four ex-Lombard Finance directors and executives has finally begun in the High Court at Wellington.
The highly anticipated trial of four ex-Lombard Finance directors and executives has finally begun in the High Court at Wellington.
The four accused pleaded not guilty to five Securities Act charges they made false statements to investors that related to the financial position of the company.
The statements, which the Crown alleged overstated the value of Lombard's loan book and the impairment of many of those loans, were in a prospectus, three advertisements and in a DVD circulated to investors.
The directors who signed off on the documentation are Lawrence (Lawrie) Roland Valpy Bryant, assistant press officer to the Queen between 1970 and 1974, Lombard chairman Sir Douglas (Doug) Arthur Montrose Graham, a former National justice and treaty negotiations minister and director William (Bill) Patrick Jeffries, a Wellington barrister, who was a former Labour justice and transport minister.
Also accused is Lombard chief executive Michael Reeves.
Prosecutor Colin Carruthers spent the day outlining his case to Justice Robert Dobson, who is hearing the case alone.
Mr Carruthers said information on Lombard's worsening financial performance was not contained in either the prospectus, the advertising or the DVD.
The court heard that Lombard Finance had five main borrowers, including Mark Bryer's failed Blue Chip Group.
All five borrowers struggled to keep up-to-date with loan repayments, many of which were simply rolled over, Mr Carruthers said.
The problems that Lombard faced receiving loan repayments on time should have been disclosed in the amended prospectus and advertisements, Mr Carruthers said, to enable prudent investors to make informed investment decisions.
The directors were responsible for making that information available, he said.
Lombard collapsed in 2007, owing 4400 investors about $127 million.
The trial, which is set down for six weeks, is proceeding.
Colin Williscroft
Mon, 17 Oct 2011
Mon, 17 Oct 2011
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Lombard trial finally kicks off
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