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Bridgecorp Ltd and Directors Prosecuted

23 June 2008

Media Release

Bridgecorp Ltd and Directors Prosecuted

The Companies Office confirmed today that it has laid criminal charges against Bridgecorp Limited and its two executive directors Rodney Petricevic and Robert Roest.

“The charges relate to statements made in the company’s prospectus, and in a director’s certificate,” said Registrar of Companies Neville Harris.

“Bridgecorp’s prospectus and its directors claimed the company had never missed an interest or principal payment.”

“In fact, between February and June 2007, Bridgecorp failed to make many of its required interest payments and investment redemptions by the due dates.”

The prosecution is being carried out by the National Enforcement Unit of the Companies Office.

The defendants are due to appear on 29 July 2008 in the Auckland District Court.

Mr Harris said the case was now before the Court and it would not be appropriate to comment further.

The Securities Commission and the Serious Fraud Office are conducting separate investigations into Bridgecorp’s affairs, and the agencies have been liaising closely as appropriate.

ENDS


The charges

The charges were laid in the Auckland District Court on 18 June.

Bridgecorp Limited (in receivership) faces one charge under the Securities Act. The company is charged with allotting debenture stock to members of the public while knowing that its prospectus was false. The prospectus claimed that Bridgecorp had never missed an interest payment or, when due, a principal repayment.

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Bridgecorp’s two executive directors, Rodney Petricevic and Robert Roest, each face two charges under the Securities Act. One charge is in relation to debenture stock and the other charge is in relation to capital notes.

Rodney Petricevic and Robert Roest also face one charge each under the Companies Act. They are charged with making a false statement to the trustee for the debenture holders when they signed a directors’ certificate on 30 April 2007. The certificate stated that “interest due on and principal moneys of the securities has been paid or otherwise satisfied on due date”.

The payments

Between February and May 2007 Bridgecorp’s late payments totalled over $16 million. The payments were typically made one or two business days after the due date.

The delay in payments ranged from one to five days in the period up to 31 May 2007 and increased to 10 days after 20 June 2007. The largest default of $1,674,814 occurred on 30 March 2007 when maturity proceeds and interest payments were not paid on time. These were paid subsequently on 2 and 3 April 2007

In June 2007 a number of interest payments and investment redemptions, totalling almost $4 million, were not made at all and still hadn’t been paid as at the date of receivership.

Penalties

If convicted on the Securities Act charge, the company and its two executive directors are liable to a fine not exceeding $300,000. If convicted on the Companies Act charge the two executive directors are liable to imprisonment for a term not exceeding five years or to a fine not exceeding $200,000.

Bridgecorp

Bridgecorp Limited went into receivership on 2 July 2007. The receivers estimate that around $450 million is owed to members of the public and that the likely recovery appears to be between 16 to 51 cents to the dollar.

© Scoop Media

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