Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Jury entitled to 'serious doubts' - National Finance defence

Carol Braithwaite. Photo / Greg Bowker
Carol Braithwaite. Photo / Greg Bowker

A High Court jury is entitled to have serious doubts about Carol Braithwaite's defence and still find her not guilty, her lawyer said.

Braithwaite is on trial in the High Court at Auckland for making untrue statements in a prospectus of National Finance 2000.

According to the Crown, there were ten material untruths in the document, an allegation Braithwaite now accepts.

She is defending the charge on the basis that she believed, at the time, the prospectus was correct.

In his closing submissions this afternoon, Braithwaite's lawyer Quentin Duff said the defence only needed to prove it was "more likely than not" that she believed the statements were true and that she had reasonable grounds for that belief.

The jury was allowed to have "serious doubts" about the defence and find her not guilty, Duff said.

Duff went on to say that Braithwaite was in the dark and had information kept from her before she signed the prospectus.

"When everything is a mess and you're in the dark, how much information is really available to you?" he asked.

Earlier in the Crown's closing address, prosecutor John Dixon queried if Braithwaite had even read the prospectus properly and had understood it.

"She wasn't qualified in the first place, (she had) never been a director of a company, never seen a prospectus before," he said.

Dixon said even if Richie McCaw puts his name to a finance company prospectus, it "doesn't change the reality" of what he would be required to do as a director.

Yesterday when giving evidence Braithwaite said she took comfort from the fact the prospectus was prepared by a chartered accountant and that a barrister was on the board of directors with her.

If there were issues with the company, she assumed others would bring them up.

Dixon said directors needed to be independent and put in place systems to monitor management.

"You can't just take their word," he said.

"She said she didn't know any better, that may be, but it's not a defence...she didn't do anything, she just had blind faith in others."

National Finance went into receivership in 2006, owing investors $21 million. Some investors have recovered 49c in the dollar.

National Finance boss Trevor Ludlow - and Braithwaite's former de facto partner - is serving a sentence of six years and four months after being convicted of charges laid by the Serious Fraud Office and the Financial Markets Authority. He was found guilty last July of defrauding investors of an estimated $3.5 million.

Both Ludlow and Braithwaite are banned from being company directors until next April.

National Finance accountant John Gray pleaded guilty to theft and false accounting charges in the Auckland District Court in 2010 and was sentenced to nine months' home detention.

- NZ Herald

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