On the final day of the Bridgecorp trial, the High Court heard that director Peter Steigrad was entitled to rely on management but faced "an almost institutional silence" about critical issues.
Steigrad - along with fellow directors Rod Petricevic and Rob Roest - is accused of misleading investors in Bridgecorp's offer documents.
But during closing submissions in Auckland yesterday, Steigrad's lawyer Brian Keane QC said critical information was withheld from his client, particularly about problems with outgoing payments to investors.
Roest and Petricevic are both accused of knowingly making false statements in offer documents that Bridgecorp never missed payments of interest or principal to investors.
The Crown says Bridgecorp began missing payments nearly five months before it collapsed in July 2007, owing 14,500 investors $459 million.
Although Roest has admitted knowing about issues with payments and alleged he told Petricevic, Steigrad denied that he knew of any problems until less than a fortnight before Bridgecorp went into receivership.
"When you get what is effectively an almost institutional silence about this at board meetings, then we get to the point where it is very difficult to criticise the decisions that were made in ignorance [of] information willfully withheld from Mr Steigrad," Keane said.
"He did not know of the 7th of February failure to make payments, he did not know of the 30th March failure to make payments. He was not told there was not enough money, therefore some of the underlying assumptions that underpin the way these charges are laid are in respect to him quite inappropriate and inapplicable," he said.
Keane also said Steigrad did not give other directors the right to sign a certificate on his behalf, which extended the life of an allegedly misleading Bridgecorp prospectus.
This extension certificate forms part of the Crown case against the three accused but was signed only by Petricevic and former Bridgecorp chairman Bruce Davidson.
Davidson was sentenced to nine months' home detention in October last year after changing his plea to guilty, and was ordered to pay $500,000 reparations and perform 200 hours of community work.
Keane said there was no evidence at trial that Steigrad gave authority to others of the board to sign.
"Mr Steigrad cannot be held liable for statements he did not make or did not authorise to be made," the lawyer said.
Keane said Steigrad also had a right to rely on information from Bridgecorp's management when assessing the truth of offer documents.
"As a non-executive director and as an independent director he must on necessity have a greater reliance on management and information provided by management and his focus should be on governance," Keane said.
Steigrad's "right to point to reliance" is stronger than that of Petricevic and Roest, who were executive directors, he said.
Steigrad has leave to return to his home in Australia until the first week of April when Justice Geoffrey Venning will release his verdict.
That same week, former Bridgecorp director Gary Urwin is expected to be sentenced after a disputed facts hearing. He originally pleaded not guilty and appeared in court with Petricevic, Roest and Steigrad but changed his plea in November last year.
The charges carry a maximum penalty of five years' jail or a fine of up to $300,000.
COURT SAGA
* The Bridgecorp trial started in October after numerous delays and finished yesterday.
* Justice Geoffrey Venning has indicated he will deliver his verdict on April 5.
