The NZ Shareholders Association today welcomed the guilty verdicts against four former Lombard finance directors.
Chairman John Hawkins said the guilty decision will be cold comfort to investors who have lost over $90m. It will not bring their money back, but at least it will send a clear
signal to all people raising funds from the public, and hopefully avoid similar debacles in the future.
Noting that the judge had indicated a custodial sentence was unlikely; Hawkins said that ordinary people felt frustrated with the discrepancy between sentences for white collar crime and other offending. You really have to wonder just how much money has to be lost before jail becomes inevitable, he said.
Hawkins said the high profile of the convicted directors may have encouraged some people to invest without proper regard for the risks involved. While the Shareholders Association urged people to make careful assessments of all investments and seek professional advice if necessary, he noted that this becomes meaningless if the information produced by the company is inaccurate in the first place
Hawkins said it was another significant win for the new FMA regulator. The judgment makes it clear that directors have a duty to understand the business they are involved in and ensure that statements issued to investors are correct. There is absolutely no place around the board table for seat warmers said Hawkins. Once again, the courts have found that honest intention is no defence. Directors must have proper oversight and make sufficient enquiries before signing matters off. We
hope the message is finally getting through, he said.
. Hawkins said the Association would await the sentencing due in March with some interest.
021 640 588