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National Finance Limited Directors Banned

National Finance Limited Directors Banned

25 November 2008

The Deputy Registrar of Companies Peter Barker has banned the directors of National Finance 2000 Limited from acting as company directors.

Mr. Barker ruled that Trevor Allan Ludlow, Carol Anne Braithwaite and Anthony David Banbrook mismanaged National Finance (amongst other companies) and it was this mismanagement that, at least partly, contributed to the company’s failure.

The mismanagement allegations include: reckless trading; failure to comply with its prospectus; breach of director’s duties; and failure to maintain adequate books and records.

Mr. Barker considered submissions from the directors in response to the allegations and found that ``both then and now, these directors do not understand their duties and responsibilities as company directors’’.

Previous Court rulings have made it clear that directors cannot avoid their responsibilities merely by saying that they did not actively participate in decisions, weren’t aware of them or relied on others.

Mr. Barker commented that investors would have relied on the directors and the decisions they made.

``A director must take steps to get in a position to monitor the company and to form independent judgment on the matters that should be considered by a director’’.

The Prohibition Notices were issued on 14 October 2008. Mr. Ludlow and Ms. Braithwaite are both prohibited for a period of four years and six months and Mr. Banbrook is prohibited for four years.

Background

National Finance’s principal business consisted of providing motor vehicle hire-purchase finance. It was put into receivership on 10 May 2006 for failing to comply with its Trust Deed, and then put into liquidation on 1 August 2008. Shortly after the failure of National Finance various related companies were also put into receivership and/or liquidation. These companies were vehicle traders (importers and wholesalers) and insurance brokers or were involved in the management of the National Finance group.

Prohibition

The maximum term of prohibition under Section 385(3) of the Companies Act 1993 is five years. The prohibition prevents those charged from acting as directors or promoters of a company, or being concerned in, or taking part, whether directly or indirectly, in the management of a company. Breach of this prohibition carries a $200,000 fine or a maximum of 5 years imprisonment.

ENDS

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