The Financial Markets Authority brought the case alleging the Bridgecorp directors breached the Securities Act by making untrue statements in investment documents and registered prospectuses in December 2006.
Four Bridgecorp directors have pleaded not guilty to making untrue and misleading statements to investors as their long-awaited High Court trial finally begins.
After four delays, the judge-alone trial of Bridgecorp managing director Rod Petricevic and fellow directors Rob Roest, Gary Urwin, Peter Steigrad opened at Auckland High Court this morning.
The Financial Markets Authority brought the case alleging the directors breached the Securities Act by making untrue statements in investment documents and registered prospectuses in December 2006.
Bridgecorp collapsed a year later, owing 14,500 investors $459 million (about $31,655 each). Receivers have estimated debenture holders could see a return of less than 10 cents in the dollar.
The four directors were placed before the court and each pleaded not guilty to ten charges under the Securities Act, which carry a maximum penalty of five years’ in jail or a fine of up to $300 thousand if they are found guilty.
Messrs Petricevic and Roest also face Crimes Act and Companies Act charges related to false statements in prospectus extension certificates and those about investor repayments.
After being charged in the dock, Judge Geoff Venning let the four men sit behind their lawyers for the prosecution’s opening.
Former Bridgecorp chairman Bruce Davidson (73), changed his plea to guilty earlier this month, was convicted and sentenced to nine months home detention, ordered to do 200 hours community work and ordered to pay $500,000 reparation. Davidson, a former president of the Auckland district law society, admitted ten charges of making untrue prospectus and investment statements linked to Bridgecorp’s 2007 collapse, which left 14,000 investors $490 million out of pocket.
It is unclear if he will give prosecution evidence against his fellow directors.
Crown prosecutor Brian Dickey is presenting opening submissions for the Crown this morning.
Once that’s completed this week, the trial will be adjourned until mid-November and is due to run into next year.
According to a recent Auckland High Court judgment the directors estimated they would need an extra $3 million to cover their trial to top up their defence insurance bill, which could exceed $5 million.
A separate trial to hear a Serious Fraud Office case against Mr Petricevic and Mr Roest has been delayed until the FMA prosecution is concluded.
The case is proceeding.
