Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Accused trio will know fate by Easter

Rod Petricevic. Photo / Greg Bowker
Rod Petricevic. Photo / Greg Bowker

Three former Bridgecorp directors accused of misleading investors are set to discover their fate by Easter as their High Court trial edges to a close.

Rod Petricevic, Rob Roest and Peter Steigrad face 10 Securities Act charges and are accused of misleading investors in Bridgecorp prospectuses and offer documents.

As well as the Securities Act allegations, Petricevic and Roest face eight counts of knowingly making false statements in offer documents that Bridgecorp had never missed interest payments or repayments of principal to investors.

According to evidence tabled by the Crown earlier in the case, Bridgecorp began missing payments from February 7, 2007. It collapsed in July 2007, owing 14,500 investors $459 million.

The directors' trial in Auckland, which began in October last year, is drawing to an end.

Yesterday Financial Markets Authority lawyer Brian Dickey cross-examined expert witness for the defence, Murray Lazelle, about Bridgecorp's loan book and liquidity.

Dickey suggested that by December 2006 all the loans that Bridgecorp could have converted to cash had been brought in.

Dickey then suggested Bridgecorp's loan book had become illiquid by February 7, 2007 when the company failed to pay investors more than $200,000 that was due to them.

"Despite all that trying, trying, trying ... .they can't squeeze $200,000 approximately out of the loan book and I'm saying that shows you the loan book had become illiquid."

"No, I'm not going to agree," Lazelle replied.

Lazelle said Bridgecorp's longer-term cashflow told a different story and by the end of the month the company was expecting to have $15 million in the bank.

Dickey then quizzed Lazelle over Bridgecorp's cash balance of $152,000 for the week ending December 1, 2006 and asked if a director seeing it would have been concerned.

The balance was more than $2 million below forecasts.

"Shouldn't they have fallen off their chair?" Dickey asked.

Lazelle said it was a low balance but that its relevance depended on cashflows and the company's expectations for the future.

The Crown cross-examination is set to finish today.

The trial is then expected to adjourn until next week when the Crown and defence are due to give their closing submissions.

Justice Geoffrey Venning has indicated he will give his verdict on Thursday, April 5.

All three directors deny the allegations against them.

Former Bridgecorp director Gary Urwin originally pleaded not guilty and appeared in court with Petricevic, Roest and Steigrad.

But he changed his plea in November last year and is awaiting sentencing in April.

The charges carry a maximum penalty of five years in jail or a fine of up to $300,000.

Former Bridgecorp chairman Bruce Davidson was sentenced to nine months' home detention in October after he changed his plea to guilty.

He was also ordered to pay reparations of $500,000 and perform 200 hours' community work.

- NZ Herald

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