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Hot Topic NBR Focus: GMO
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SFO charges more finance company directors

The former directors of the failed Five Star group appeared in court this afternoon on charges laid by the Serious Fraud Office.Marcus Macdonald, Anthony Bowden, Nicholas Kirk and Neill Williams, an alleged shadow director, were remanded on bail until Sep

Duncan Bridgeman
Wed, 25 Aug 2010

The former directors of the failed Five Star group appeared in court this afternoon on charges laid by the Serious Fraud Office.

Marcus Macdonald, Anthony Bowden, Nicholas Kirk and Neill Williams, an alleged shadow director, were remanded on bail until September 16.

The SFO has issued a statement saying it has laid over 100 charges under the Crimes Act.

The charges relate to related party lending that occurred between 2003 and 2007. Loans in question have a total value of $50 million, a large proportion of which is irrecoverable, the SFO said.

The charges allege that the four defendants:

- intentionally applied funds in breach of the company’s obligation under its trust deed; and/or

- dishonestly used documents with intent to obtain a benefit.
The offences each carry a maximum penalty of seven years imprisonment.

In court today the four defendants entered no plea and were remanded on bail. They were ordered to relinquish their passports.

The four already face charges under the Securities Act and the Financial Reporting Act.

Those charges relate to false and misleading information in investment statements and the company's 2006 registered prospectus.

That trial will begin on October 26 and is expected to last three or four weeks.

The Five Star group collapsed in 2007 owing investors more than $100 million.

A report released last year by the Ministry of Economic Development’s National Enforcement Unit linked Mr Williams to $19 million loans made to family members and friends for which no documentation could be found.

Last August the directors were banned from directing or managing companies for five years.

SFO director Adam Feeley said the case was one of the largest and most complex investigated by the agency in recent years.
“Investigations of the scale and complexity of Five Star Finance require detailed forensic accounting analysis which inevitably takes time.”

Mr Feeley said that the SFO’s major cases currently under investigation, which include Capital + Merchant Finance Ltd; Aorangi Securities Ltd; Belgrave Finance; and allegations of fraud inside the Accident Compensation Corporation, were all scheduled to be completed well inside the SFO’s new 12 month performance target.

Duncan Bridgeman
Wed, 25 Aug 2010
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SFO charges more finance company directors
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