Petricevic: Finances weren't deteriorating

Crown cross-examination of Rod Petricevic has finished at Auckland High Court, with the Bridgecorp former managing director saying he didn't think its finances were deteriorating in the lead-up to its receivership.

Mr Petricevic said cashflow was "tight but manageable" and "not materially different" when asked to compare cashflow in March 2006 to June 2007.

A delayed interest payment to Bridgecorp at the end of the 2007 financial year has been central to Crown evidence in the trial -- alleged to be the day the money ran out.

Interest payments due to be paid on Friday March 30 were instead paid on Monday, April 2.

Crown lawyer Warren Cathcart asked Mr Petricevic if he considered a finance company that regularly missed interest and maturity payments to investors, to be a company that had deteriorated considerably.

Mr Petricevic, who has just spent almost four days in the witness box, said he did not.

"Mr Cathcart, I stand by my statement that I do not believe Bridgecorp missed its interest payments.

"It was paid on the next working day, as per normal business practice. That is not a missed interest payment," said Mr Petricevic.

Mr Cathcart: "Do you say that a financial company that regularly misses payments when they are due as financially deteriorating?"

Mr Petricevic: "Are you talking about Bridgecorp or generally?"

Mr Cathcart: "Generally."

Mr Cathcart then asked Mr Petricevic if he considered Bridecorp, in the months from February 2007 to its July 2007 receivership, to have deteriorated.

Mr Petricevic: "No sir."

Justice Geoff Venning, hearing the trial alone, asked Mr Petricevic if, having heard the evidence, he now accepted that, on some occasions from February 7, 2007 onwards, Bridgecorp had failed to make payments on due dates.

"I accept that now, your Honour."

Justice Venning reiterated that between May 2006 and Bridgecorp's July 2007 receivership, it did not engage in any new lending.

He asked Mr Petricevic to explain how Bridgecorp considered it was going to earn money to pay its investors during those months, given its income source had dried up.

Mr Petricevic told the court, money it was relying on to come in from the Momi Bay development in Fiji to relieve tight cashflows.

"We were waiting for monies we always believed were to come in from Momi Bay."

In the meantime, it was relying on assets from within the wider Bridgecorp group to help it meet its obligations.

Mr Petricevic's fellow director Rob Roest is due to be called to the witness box to give evidence in his defence this afternoon.

The pair, and fellow director Peter Steigrad have denied the charges.

Financial Markets Authority charges they mislead investors in the company’s 2006/2007 prospectus and associated financial statements.

The charges carry a maximum penalty of up to five years in jail or a fine of up to $300,000.