A man alleged to be a prime mover in the failed Five Star group did not help to prepare allegedly misleading offer documents, a court has heard.
Neill Williams pleaded guilty in 2010 to charges concerning mis-statements made in the 2006 prospectus and investment statement of now collapsed Five Star Consumer Finance.
But the 79-year-old later argued he only did so because he was too ill to endure a trial.
The undischarged bankrupt made two unsuccessful attempts to vacate his plea, one in 2011 and another in March last year.
Williams was not a listed director of Five Star Consumer Finance or related company, Five Star Finance, but did some work for the firms.
However, the Financial Markets Authority, which is bringing the case against him, alleges he was a prime mover at Five Star if not, at times, a controller of events.
After failed attempts to reverse his guilty plea, a disputed facts hearing to determine Williams' culpability began yesterday in the Auckland District Court.
Following this hearing, Williams is due to be sentenced.
Former Five Star director Marcus MacDonald, who pleaded guilty in 2010 to misleading investors, appeared as a Crown witness at yesterday's hearing and said Williams had not been involved in preparing the allegedly misleading prospectus.
But during his evidence, MacDonald told the court how the defendant had been involved with Five Star Finance since its formation in the early 1990s.
At this time, Williams did not want to be involved as a director of Five Star because some adverse publicity had arisen through his ties with a company called Dairy Containers Ltd, MacDonald said. Rather than being an employee of the company outright, it was agreed that Williams would work for another Five Star director, Nicholas Kirk. Through Kirk, Williams' partner (now his wife), also held shares in the firm. Williams typically worked three days a week at Five Star Finance but Kirk, who also appeared as a witness yesterday, said the board regarded the man as a "senior executive".
The hearing continues today with evidence from Kirk, followed by that of another former Five Star director, Anthony Bowden.
Five Star Consumer Finance collapsed in 2007 owing $54 million to 2300 investors who to date have received 23c in the dollar back. Five Star Finance also fell into receivership in 2007, owing $42 million.By Hamish Fletcher @hamishfletcher Email Hamish