National Finance director pleads guilty

Trevor Ludlow. Photo / Dean Purcell

Former National Finance director Trevor Allan Ludlow yesterday pleaded guilty to eight charges of misleading investors and making false financial statements.

Ludlow, with fellow directors Carol Braithwaite and Anthony Banbrook, was accused of making untrue statements in the registered prospectus for National Finance 2000, dated September 22, 2005. National Finance went into receivership in 2006, owing investors $21 million.

Forty-nine cents in the dollar has since been recovered and paid out to some investors. Braithwaite and Banbrook deny the charge.

The single charge under the Securities Act was brought by the Financial Markets Authority and carries a maximum penalty of five years' imprisonment or fines of up to $300,000.

Ludlow also faced seven charges for making false financial statements.

According to a summary of facts, which Ludlow signed, the former director knew about the untruths and directed those statements be incorporated into financial documents.

Each of the untrue statements contributed to the failure of the company, the summary said.

Ludlow was found guilty in July of separate criminal charges laid by the Serious Fraud Office relating to theft as a person in a special relationship and false accounting. The director was found to have breached the terms of the trust deed under which National Finance operated, defrauding investors of an estimated $3.5 million.

This included about $2.7 million of unauthorised or unsecured advances made to his Payless Car group of companies, undisclosed related party transactions totalling more $800,000 to an audio company; a property in Fiji, and land purchased for another company he owned. In October, he was sentenced to five years and seven months in jail.

Although Ludlow's lawyer Grant Collecutt yesterday requested that Ludlow's latest sentencing take place on Friday, the FMA said it would be more appropriate for sentencing to take place in the New Year. Justice John Priestley said a January sentencing would be more suitable because Ludlow was already incarcerated and there were "complicated issues" with his case.

It would be unfortunate if Ludlow was "sentenced on the hoof", Justice Priestley said.

"This is not a simple task ... I'm not going to do it in a once-over-lightly fashion," he said.

Ludlow will be sentenced on January 26. He is in Mt Eden prison but told the High Court at Auckland yesterday he was trying to change his accommodation.

"There is nothing to do in Mt Eden ... it's a horrible environment," he said. "I have, through a friend of mine, enrolled to do some correspondence education. I can't do that in Mt Eden. I wish to move on from Mt Eden."

Ludlow plans to do a business course through the Open Polytechnic, his lawyer said outside court.

The former director openly discussed issues with his accommodation with Justice Priestley, despite being advised to use a lawyer to communicate with the court.

"I can't help you," said the judge. "You've been found guilty and sentenced to jail."