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

 


Lombard four begin push to reclaim reputations

Lombard four begin push to reclaim reputations, say they couldn’t predict ‘perfect storm’

March 4 (BusinessDesk) – Former Lombard Finance directors Sir Doug Graham, Bill Jeffries, Lawrie Bryant and Michael Reeves began their attempt to reclaim their reputations in the Court of Appeal, saying they couldn’t have foreseen the ‘perfect storm’ that engulfed finance companies starting in early 2008.

All four were in the Court of Appeal in Wellington, accompanied by family members, to hear their lawyer Jim Farmer QC begin his case. The hearing is set down for four days though that includes one day for the Crown to appeal against the sentences handed down.

The four avoided the jail term the Crown had sought and were sentenced to community service in March last year after being found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008. At sentencing, Justice Robert Dobson said the damage to the men’s reputation of a criminal conviction couldn’t be underestimated.

Farmer argued today that projections the Lombard board had in signing off on the prospectus in late 2007 gave them some confidence the finance sector climate could improve and that in any case the prospectus did broadly outline the key risks for investors. Those included being a lender on terms outside the parameters of retail banks.

That included the risk Lombard would not be able to repay its borrowing obligations in the event of an extreme loss of confidence in the sector.

“The unforeseen and dramatic change in February 2008 reflects the risk,” Farmer said. “The extreme event, the perfect storm arrived.”

The 4,400 Lombard Finance investors were owed $127 million at the time of the receivership in April 2008. The failed company’s major asset was a property loan book of 27 loans with a book value of $136.8 million, mostly for bare land subdivisions or development properties. Of the 27, only nine were first ranking security.

Finance company failures began in 2006 and the following year big names including Bridgecorp, Nathans Finance, Geneva Finance and Capital + Merchant had joined the list.

Still, 2008 was to yield even greater carnage, with 22 finance companies failing or going into moratorium.

Justice Anthony Randerson asked Farmer to provide a full time-line of industry failures and asked whether he viewed the failures of Bridgecorp and Nathans in 2007 as being well known in the market place.

“If anything, the reinvestment rate remained very strong up until the time of the prospectus even though there was concern about finance company collapses,” Farmer said.

At the sentencing last year Justice Dobson said the offending of the Lombard investors was serious but not of the same magnitude of those involved in Bridgecorp or Nathans Finance.

Sir Doug told BusinessDesk at the break that there has been something of a baying for blood with finance company directors, with few if any escaping censure. He said the media hadn’t helped with its salacious portrayal of the Lombard directors.

Graham and Bryant each received 300 hours community service and were required to pay $100,000 each in reparation, while Jeffries and Reeves were sentenced to 400 hours community service.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news