Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Douglas failed in role as Lombard chairman, Crown says

Douglas failed in role as Lombard Finance chairman, Crown says

By Paul McBeth

Jan. 31 (BusinessDesk) – Douglas Graham failed in his role as chairman of Lombard Finance & Investments by not taking a more active role in getting to know the property development business as the lender ultimately failed, the Crown prosecutor says.

Graham, better known for his work on Treaty settlements in the 1990s as a cabinet minister, let Lombard Finance’s management deal with an increasingly problematic loan book, and didn’t lead greater board scrutiny of the lender’s practices, prosecutor Colin Carruthers told the High Court in Wellington in his closing argument.

When the lender was in trouble, Graham should have ensured he became “knowledgeable about the state of the loans, what obstacles existed, what the likely impact was,” he said.

One of the “rare examples” of Graham showing an adequate amount of scepticism was over the recoverability of loans to Mark Bryers and Blue Chip, he said.

“The Crown’s position is that the evidence establishes the accused failed to fulfil their obligations and that failure deprives them of the reasonable grounds defence,” he said.

Carruthers said the tension between supporting the company’s commercial goals was trumped by disclosure requirements under the law.

The Crown contends Lombard Finance directors Graham, Bill Jefferies, Lawrence Bryant and Michael Reeves made untrue statements in a 2007 prospectus, investment statement and advertising material.

In response to questioning from Judge Robert Dobson as to whether Lombard Finance’s stated lending policy implied it was a conservative lender, Carruthers said the recoverability of the loans wasn’t as secure as the amended prospectus stated.

The Crown didn’t address Lombard Finance’s decision not to diversify its lending beyond property development, as indicated in the offer documents, Carruthers said in response to a question from Judge Dobson.

Paul Davison, counsel for Graham and Bryant, will make his closing argument tomorrow, with the lawyers for Jeffries and Reeves set down for the rest for the subsequent two days.

Lombard went into receivership on April 10, 2008, owing approximately $127 million to about 4,400 investors, and it is unlikely that secured debenture holders will receive more than 24 percent of their investment back. Unsecured creditors are likely to receive nothing.

The case is continuing.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news