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

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news