Friday 2nd September 2011 3 Comments
|Text too small?|
The Nathan's Finance saga came to a conclusion today after the High Court in Auckland handed down two prison sentences and a home detention to three directors of the failed finance company for making untrue statement on its registered prospectus.
Chairman Roger Moses was ordered to serve two years and two months in prison out of a possible five year sentence, and ordered to pay $425,000 in reparations. Fellow director Mervyn Doolan was sentenced two years and four months prison term, with reparations of $150,000. Donald Young was ordered to serve nine months of home detention and complete 300 hours of community service.
The sentencing was welcomed by the Financial Markets Authority, with the watchdog saying it sent a clear message that the inclusion of untrue statements in issuers' offer documentation as a serious breach of law.
"The guilty verdict in this case, and the penalties imposed, show financial markets participants can expect to be held accountable for their conducts," FMA chief executive Sean Hughes said in a statement. "This case demonstrates that directors have a personal duty to ensure documents and advertisements offering securities to investors do not mislead or deceive."
Today's sentences come after the three were found guilty in July of making untrue statements on a registered prospectus and investment statement in December 2006, concerning lending to related parties, disclosure of bad debts and liquidity levels, that its lending was diversified, and that it made loads and managed them in accordance with robust policies and processes.
The directors were also found to have made further untrue statements when they signed a prospectus extension certificate in March 2007, stating that the company's financial position had not materially or adversely changed since the prospectus was issued.
Lastly, they were also found to have also made these untrue statements in letters to the public, advertising Nathan's Finance.
All three defendants denied the charges.
The case was helped by former director John Hotchin, brother of Hanover Finance director Mark Hotchin, who pled guilty and agreed to give evidence for the prosecution in return for a lighter sentence.
In March he was sentenced to 11 months' home detention and ordered to pay $200,000 in restitution. He was not charged with sending letters containing untrue statements to the public as he had resigned from the company when the adverts were sent out.
Nathans was sent to the receivers in 2007 owing some 7,000 investors about $174 million.
In November, the Serious Fraud Office gave up pursuing a prosecution against Nathans’ parent company, VTL Group, saying its case couldn’t reach the appropriate threshold to proceed.
The SFO was investigating the authenticity of three licensing transactions VTL entered into with an American company in 2005 and 2006.
New Zealand Rural Land Company Limited (NZX: NZL) Agreement to acquire large scale dairy asset portfolio
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto