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

 


Dominion CEO sentenced

Media Release

23 May 2013

Dominion CEO sentenced

The former CEO of Dominion Finance Group Limited (Dominion) and North South Finance Limited (North South) was today sentenced in relation to four Crimes Act charges laid by the Serious Fraud Office (SFO) arising out of the collapse those companies.

Paul William Cropp (49) was sentenced to two years and seven months imprisonment in the Auckland High Court.

Prior to their collapse, the companies undertook related party lending totaling approximately $13.57 million. That lending was in breach of the companies’ trust deeds, and Mr Cropp was convicted in April 2013 of offences of theft in a special relationship arising out of his role in facilitating that lending.

Acting Chief Executive for SFO, Simon McArley said, "This outcome sends a message to those managing and controlling public issuers that they will be accountable for their conduct. Hopefully this and the other successfully completed finance company prosecutions will begin to restore the public’s confidence in the integrity of our financial markets and savings institutions”.

SFO opened its investigation into Dominion and North South in October 2010, following a referral from the Securities Commission (now Financial Markets Authority).

ENDS

Notes for Editors

Background to investigation

Dominion Finance Group Limited (Dominion) and North South Finance Limited (North South) were the operating subsidiaries of NZX listed Dominion Finance Holdings Limited (Dominion Holdings). Both companies traded as finance companies offering commercial and property loans and accepting deposits from the public.

Both companies suspended performance of their obligations to investors in July 2008 and proposed moratorium arrangements.

The Trustee appointed for the Dominion depositors, Perpetual Trust Limited, declined to support the proposal and the company was put into receivership in September 2008. At the time of the appointment of receivers Dominion owed 5,937 debenture holders approximately $177 million. Wholesale lenders were owed approximately an additional $55 million.

The Trustee acting for the North South depositors, Covenant Trustee Company Limited, accepted the proposal and the moratorium continued until July 2010, at which time receivers were appointed. Liquidators were subsequently appointed on 17 September 2010. At the time of the appointment of receivers, North South owed debenture holders approximately $31 million. In addition, wholesale lenders were owed approximately $15 million.

Parent company Dominion Holdings entered voluntary administration on 15 October 2008. Following an administrators recommendation to that effect, it was placed into liquidation on 3 February 2009. It has an estimated deficit owed to creditors in excess of $115 million.

In total the group is recorded as having unpaid creditors in the region of $400 million.

Crimes Act offences:

Section 220: Theft by person in special relationship

(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—

(a) to account to any other person for the property, or for any proceeds arising from the property; or

(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

Role of SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

SFO operates three investigative teams:

• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part II of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

SFO’s Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO’s three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news