Director pleads guilty to misleading statements

Ministry of Economic Development: Press Release

15 December 2009

Clegg and Co Finance Director pleads guilty to misleading statements

Brian Clegg, the director of failed finance company Clegg and Co Finance Limited (In Receivership) was sentenced in the Auckland District Court today for six offences against the Companies Act and the Securities Act. Mr Clegg had earlier pleaded guilty to these charges.

Mr Clegg was sentenced to twelve months home detention on five charges, and convicted and discharged on one charge.

``A number of these charges relate to false and misleading statements made in the company’s 2005 and 2006 prospectuses and to the company’s Trustee,’’ said the Registrar of Companies, Neville Harris.

``A separate charge relates to misleading or deceiving the Securities Commission.’’

The National Enforcement Unit of the Companies Office began its investigation after the matter was referred to it by the Securities Commission.
Clegg & Co Finance Limited went into receivership on 4 October 2007. At the time the company was placed into receivership the total balance owing to investors was over 15 million dollars. Anticipated returns to investors are between 55 and 60 cents in the dollar.
The charges

Brian Clegg pleaded guilty to the following six charges:

• Two charges under section 58 of the Securities Act 1978 for providing false information in the company’s 2005 and 2006 prospectuses. The company advised in these prospectuses that it had complied with the requirements of the related party requirements set out in its Trust Deed, when it had not.
• Three charges under section 377 of the Companies Act 1993 for providing false information in relation to the extent of related party lending in reports provided to the trustee, Covenant Trustee Company Ltd.
• Convicted and discharged on one charge under section 59A of the Securities Act 1978 for misleading the Securities Commission about the true financial position of the company.

ENDS

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