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

 

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news