Prison for former Five Star directors

Tuesday 21st December 2010 5 Comments

Two former Five Star Finance directors, Nicholas Kirk and Marcus MacDonald, have been sentenced to prison terms at Auckland District Court today.

Serious Fraud Office (SFO) chief executive Adam Feeley said, "SFO is pleased with the delivery of a custodial sentence. This is the first sentencing in relation to a major finance company collapse, and continues the clear message from the Courts as to the seriousness of white collar crime."

Kirk was sentenced to two years and eight months while MacDonald was jailed for two years and three months.

Both men had pleaded guilty to Securities Act and Financial Reporting Act charges earlier this year.

Former Five Star director Anthony Bowden was sentenced to nine months home detention and 300 hours community work.

Five Star collapsed back in August 27 with approximately $47 million debts to investors and charges were laid against Kirk, MacDonald and Bowden in July 2008 relating to securities being offered and allocated to the public without a registered prospectus, investment statement or trustee appointed.

Neill Williams also pleaded guilty but was not sentenced today after requesting a disputed facts hearing which will take place in March.

The four men were also banned in April 2009 by the Registrar of Companies from holding board or management positions in New Zealand companies for five years, and former chartered accountant Bowden has been suspended for five years for working as a chartered accountant.

Comments from our readers

On 21 December 2010 at 5:53 pm barryf said:

Let's hope the courts follow through in regard to similar cases involving white collar crime.

On 21 December 2010 at 10:18 pm Steve Gardner said:

Not nearly long enough. The old grannys that were fleeced have a lifetime sentence

On 22 December 2010 at 12:50 pm Chris said:

So many cheats out there, lets hope that it catches up with all of them at some time

On 22 December 2010 at 4:30 pm jp said:

The Five Star guys broke the law. Has Watson/Hotchin actually broken the law? There has been ample time for the Securities Commission/Fraud Office to check this out. If they have then lay charges seize their assets take it all. But at the moment the Securities Office is just pandering to the outcry. Please I am no supporter of these guys or any of the other directors of these companies who break the law, but don’t throw every director in the same pot. Many are just victims of the Global Financial Crisis. I ask, where the Securities Commission was when they signed off on Bridgecorp’s prospectus in Feb 2007. That prospectus now seems a litany of lies. Same again with Capital + Merchant in September 2007. There are many directors still to answer for the problems, but most of all our regulatory bodies need to stand up and admit they made mistakes. Ms Diplock says the Securities Commission did not make mistakes. Well Ms Diplock you were the final frontier against the Five Star & Bridgecorp’s of this world and the outlaws shot you down. Please tell us where, legally, Hotchin has gone wrong. We all believe that morally he maybe bankrupt but there are many like that, whilst repugnant, its not illegal.

On 1 January 2011 at 8:34 pm Peter Worrall said:

It's not only the company directors at fault...what about the greedy Financial Advisors who put their clients funds in jeopardy through "incentives"/exorbitant commissions offered by the rotten companies and/or through their lack of homework to sieve through which companies were sound and which were not...many were still advocating such companies as Capital & Merchant, MFS, well after it was known by the astute FA's that they were a grave risk.