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

 


FMA issues formal warning to St Laurence directors

FMA issues formal warning to St Laurence directors - investigation closed

The Financial Markets Authority (FMA) has closed its investigation into St Laurence Limited (in liquidation) and has formally warned eight directors of St Laurence Limited in respect of potential breaches of the Securities Act.

Based on the evidence it has seen, FMA considers that St Laurence’s September 2007 prospectus failed to properly disclose information about loan quality and liquidity for the period March – June 2008. The directors have been advised of these findings.

FMA has reached the view that in distributing the prospectus with inadequate disclosure, there was likely to be a breach of the Securities Act 1978, for which the directors may be liable.

The directors who have been warned are: Kevin Podmore, James Sherwin, Geoffrey McWilliam, Keith Sutton, Barry Graham, Aeneas Edward O’Sullivan, Andrew Walker, and Sandra Lee (alternate for Kevin Podmore and Aeneas Edward O’Sullivan).
Taking into account FMA’s enforcement policy and public interest considerations, it has determined that issuing a warning, rather than bringing court proceedings, is the appropriate and proportionate response in this case.

FMA concluded that minimal additional benefit in terms of punishment, deterrence or redress for investors would have been achieved by taking any proceedings in Court.

FMA’s decision to issue a formal warning took into account a number of factors, including:
The short, four-month period in which FMA believes the disclosure breaches occurred, during which reinvestment in St Laurence was low

The absence of evidence of personal gain or dishonesty involved in the alleged misconduct

Defences that might have been argued by the directors in court.

During the short period in 2008 under consideration there were no new or rolled-over investments in St Laurence capital notes. Investments in St Laurence secured debentures during this period totalled approximately $4.5 million. That indicates total aggregate losses to investors of $3.3 million, taking into account recoveries.

FMA’s Head of Enforcement, Belinda Moffat said “In balancing the cost of taking this case to court against the low level of recovery that might be achieved and also considering the possibility of successful defences being argued, FMA has elected to issue formal warnings to the directors.

“A further relevant factor in deciding to issue a warning rather than take the case to court was the absence of evidence of personal gain or dishonest conduct on the part of the directors.”

Ms Moffat said in FMA’s view, the St Laurence prospectus, issued in September 2007, did not contain adequate information about the company’s declining liquidity and loan quality, which FMA believes became material from March 2008.

FMA considers that the financial health of St Laurence disclosed to investors, from this period, did not reflect the true position of the company, and the directors should have recognised this and ensured the appropriate disclosures were made.

St Laurence withdrew the September 2007 prospectus on 30 June 2008.

St Laurence went into receivership in April 2010. Distributions by the receiver to date have totalled 16.7 cents in the dollar.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news