Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Urwin to appeal prison sentence

Former Bridgecorp director Gary Urwin. Photo / Steven McNicholl
Former Bridgecorp director Gary Urwin. Photo / Steven McNicholl

Former Bridgecorp director Gary Urwin, whose legal bills so far have cost the taxpayer tens of thousands of dollars, will appeal his two-year prison sentence.

Urwin was sentenced in the High Court at Auckland last week on charges of misleading investors.

His lawyer, David Reece, pushed for a sentence of home detention but Justice Pamela Andrews said this would not be appropriate.

Reece said last week that he was considering making an appeal because Urwin was within the threshold required to receive home detention.

Reece confirmed to the Herald yesterday that Urwin would appeal in the next few days.

Urwin is entitled to receive legal aid. His bill, subject to the filing of further invoices, stands at $46,801.

The 62-year-old accountant originally went to trial with fellow Bridgecorp directors Rod Petricevic, Rob Roest and Peter Steigrad, but then changed his plea to guilty.

These three men were convicted last month of misleading investors in Bridgecorp's offer documents. Petricevic will be sentenced tomorrow and the other two will appear on May 18.

Roest has received $156,766.39 from legal aid for his defence.

At the sentencing last week Justice Andrews said Urwin was likely to have known about Bridgecorp's deteriorating financial health and that the company missed payments to investors before it collapsed owing $459 million.

"You were either grossly negligent or were likely to have knowledge of Bridgecorp's negative liquidity position and that it had missed payments of interest or principal," she said.

The judge referenced four victim impact statements from out-of-pocket Bridgecorp investors, who lost between $10,000 and $2 million each.

"Whatever their loss was, it was money they could not afford to lose. They have all been severely affected," Justice Andrews said.

The judge also said the former director had knowledge of both sides of the "Barcroft transaction", a related-party deal between Bridgecorp and a company Urwin had interests in.

Despite the ties between the two companies, the transaction was labelled as unrelated in Bridgecorp's offer documents.

The judge said this "masked the true level of related party lending" at Bridgecorp and inflated the failed finance company's profits.

She said Urwin was in a different position to former Bridgecorp chairman Bruce Davidson, who was sentenced to nine months' home detention last October and ordered to pay $500,000 reparations and perform 200 hours of community work.

In comparing Urwin's position with other finance company directors who have been before the courts, Justice Andrews said she could not accept that Urwin's level of culpability was "significantly less" than former Nathans Finance bosses.

Three former Nathans' directors - Kenneth (Roger) Moses, Mervyn Doolan and Donald Young - were found guilty last year of making untrue statements in the company's registered prospectus and investment statement dated December 13, 2006.

Moses was sentenced to two years and two months' jail and ordered to pay $425,000 in reparations. Doolan was sentenced to two years and four months' jail and ordered to pay $150,000.

Young was sentenced to nine months' home detention plus 300 hours of community work and reparations of $310,000.

Another former Nathans' director, John Hotchin - who pleaded guilty to Securities Act charges and gave evidence in the Crown's case - was sentenced to 11 months' home detention, 200 hours' community work and ordered to pay $200,000 in reparations.

Justice Andrews said she did not accept last month's situation of four Lombard Finance directors - who all escaped jail terms at their sentencing last month - was comparable to Urwin's case.

"I do not accept that you were let down by poor financial or legal advice ... directors are required to exercise judgment and to test the competence of management," the judge said.

When delivering his verdict in the Petricevic, Roest and Steigrad case, Justice Geoffrey Venning had said it was inevitable that Roest and Petricevic would face jail time. Both are in custody.

- NZ Herald

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