Bridgecorp boss guilty

Former Bridgecorp chairman Bruce Davidson stands in the dock as he is sentenced in the High Court at Auckland yesterday. Photo / Dean Purcell

Former Bridgecorp chairman Bruce Davidson escaped a jail term yesterday as he was sentenced to nine months of home detention for misleading investors.

The 73-year-old is the first of five Bridgecorp directors to go through the court system after the finance company collapsed owing $459 million to 14,500 investors.

And although Davidson will not go to jail, the judge warned that last month's Nathan Finance decision - in which two directors were sent to prison on similar charges - showed imprisonment was a real prospect for those found guilty of misleading investors.

In the High Court at Auckland, Justice Pamela Andrews gave Davidson credit for several factors, including his remorse and good character.

She ordered him to pay $500,000 in reparations, which the court will distribute to the failed finance company's out-of-pocket investors.

And the judge ordered Davidson to do 200 hours' community work.

Last night, a lobby group representing investors in Bridgecorp said it was disappointed in the sentence, which Davidson will serve in his Parnell home.

"If a person like you or me cheated someone out of [this] sort of money ... I'm certain we wouldn't get home detention," said Gray Eatwell of Exposing Unacceptable Financial Advice.

Some investors lost all of their retirement savings when Bridgecorp collapsed in 2007.

The Financial Markets Authority - formerly the Securities Commission - alleged Davidson had misled investors in Bridgecorp offer documents issued from December 2006 to July 2007.

Davidson previously said he was not to blame for the company's collapse, and last year pleaded not guilty to 10 Securities Act charges relating to the investment documents.

He changed his plea to guilty last month.

Davidson maintained he had genuinely believed the investment statements were true and he did not act dishonestly.

In court yesterday, Justice Andrews said she accepted that Davidson had not erred intentionally and had been "kept in the dark" about aspects of the company's ailing financial health.

Despite this, he should have been more alert to Bridgecorp's situation, and had overlooked important issues.

As part of his guilty plea, Davidson had recognised he should have acted differently.

Although the charges carried a maximum sentence of five years' imprisonment, Justice Andrews said she did not believe a jail term was appropriate in this case.

Davidson had shown "genuine, sincere and deep remorse" over investors' losses.

This, Davidson's good character and his guilty plea were mitigating factors in his reduced sentence.

Mr Eatwell said the court had been soft on Davidson.

"It really doesn't send a very good message. The investors certainly don't get much solace out of it, that's for sure."

Mr Eatwell said the $500,000 in reparations could be a lot of money to Davidson, or it might be nothing at all. "It's very hard to know the full story with these guys".

Investors had long been urging the Government to establish a royalcommission of inquiry into the collapse of companies such as Bridgecorp.

Mr Eatwell said the "mess was too big" for confidence and justice to be restored through the court system alone.

It was difficult to overstate the damage Davidson and others had done to thousands of investors, he said.

"A lot [of the investors] are on 'home detention' because they can't afford to go anywhere - if they've still got a home to live in."

Four Bridgecorp directors - Rod Petricevic, Rob Roest, Gary Urwin and Peter Steigrad - are also facing Securities Act charges and have pleaded not guilty.

Their trial is to start on October 25.

Petricevic and Roest also face Serious Fraud Office charges, which are to go to trial next year.additional reporting: Nicholas Jones