UPDATED: Lombard’s Graham, ‘old men’ get community work

UPDATED: Lombard’s Graham, ‘old men’ get community work, fines

(Adds reaction from Lombard investor from sixth paragraph, no comment from Graham)

By Pattrick Smellie and Paul McBeth

March 29 (BusinessDesk) – All four directors of Lombard Finance and Investments has escaped prison sentences although former chief executive Michael Reeves only escaped prison or home detention because of ill health and family obligations.

Judge Robert Dobson said expressions of remorse by former chairman Doug Graham and fellow director Lawrie Bryant are mitigating factors in final sentencing. The other director, Bill Jeffries, declined to express remorse.

Graham, who left the court without commenting to waiting media, and Bryant were sentenced to 300 hours community work and fines of $100,000 apiece. Jeffries and Reeves were sentenced to 400 hours community service.

Lombard Finance went into receivership in April 2008, owing approximately $127 million to about 4,400 investors.

Last month they were found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008. The judge ruled in favour of the Financial Market Authority’s case on two of the five points over untrue statements.

Paul Wah, a Lombard investor, said the sentence was “in the order of what I expected or possibly a little more than I expected.”

“There’s no point in jailing old men.”

He welcomed the judgement because it would allow either the receivers or the trustee to launch a civil class action, which might give Lombard investors some redress.

“For two former justice minister to parade around with a number on their back, that wouldn’t be very appropriate would it.”

Crown prosecutor Colin Carruthers QC had urged the High Court in Wellington to impose custodial sentences of 2 years to 2 ½ years for non-executive directors Douglas Graham, Lawrence Bryant and Bill Jeffries. He argued for two years, nine months for chief executive Michael Reeves.

But defence counsel argued their clients had already suffered injury to the reputations and no more than a community sentence or fine would be appropriate.

(BusinessDesk)

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