Jamie Gray

Jamie Gray is a business reporter for the New Zealand Herald and APNZ wire agency

Dominion Finance trio get home detention

Dominion Finance and North South Finance directors Rick Bettle (l) Paul Forsyth and Vance Arkinstall (r).
Dominion Finance and North South Finance directors Rick Bettle (l) Paul Forsyth and Vance Arkinstall (r).

Three directors of failed finance companies Dominion Finance and North South Finance were all sentenced to at least 10 months' home detention when they appeared in the High Court at Auckland today.

Justice Sarah Katz sentenced Vance Arkinstall to 10 months' home detention and 200 hours of community service.

Rick Bettle was sentenced to 10 months' home detention, 200 hours of community service and ordered to pay $90,000 in reparation.

Paul Forsyth was sentenced to 11 months' home detention, 200 hours of community service and ordered to pay $50,000 in reparation.

Financial markets authority chief executive Sean Hughes said the men failed to perform their role as directors and that they did not take the steps required to ensure that they were aware of the true position of the company.

"Investors, many of them elderly, lost significant amounts of money and the effect of this has put a great deal of financial and emotional strain on them," Hughes said in a statement.

"They did not deserve this betrayal of trust," Hughes said.

He said the case highlighted the responsibility of directors to provide truthful, accurate and timely disclosure of material information to investors.

Dominion Finance and North South Finance were subsidiaries of Dominion Finance Holdings.

Dominion Finance went into receivership in 2008 owing $176.9m to about 5,900 investors. North South Finance was placed in receivership in 2010 owing $31m to about 3900 debenture holders.

In June, Arkinstall and Bettle pleaded guilty in June to five Securities Act charges for signing offer documents that contained untrue statements.

Forsyth pleaded guilty to seven Securities Act charges in a case brought by the Financial Markets Authority.

The men admitted the charges in the High Court at Auckland just days before their trial was due to start.

Their offending was tied to the finance companies' prospectuses, extension certificates or advertisements and the representations in them.

Some charges arose because related-party lending was not disclosed in Dominion Finance's 2007 prospectus.

Arkinstall and Bettle's summary of facts, which they agreed to, said the men "acted honestly at all times".

Fellow Dominion director Robert Whale also pleaded guilty and was sentenced in June to 12 months' home detention, 250 hours of community service and ordered to pay $75,000 in reparations.

Another board member, Anne Butler, received a nine-month home detention sentence and was ordered to pay $300,000 in reparations and to do 80 hours of community service.

- APNZ

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