'Bad look' boat deal nets Petricevic extra jail

Rod Petricevic bought the luxury Medici despite Bridgecorp's board rejecting the purchase. Photo / Kenny Rodger

The Bridgecorp board told Rod Petricevic that buying a luxury launch would be a "bad look" - but he had already flown to Japan and agreed to buy the boat, eventually paying $1.8 million for it.

Yesterday, the former managing director of the failed finance company had four months added to his six-and-a-half-year jail sentence after he pleaded guilty in the Auckland District Court to four charges.

They related to the launch Medici, which Petricevic bought with Bridgecorp money, despite the board's opposing it.

The 63-year-old admitted theft, fraudulently using a document and two charges of making false statements to the trustee of Bridgecorp over the purchase of the Medici. Three other charges were withdrawn.

According to court documents, in March 2002 Petricevic employed a "boat launcher" and the pair flew to Tokyo for three days to look at buying a vessel.

A month later, he had signed an agreement with the owners of the Medici to buy the boat and bring it to New Zealand.

The Serious Fraud Office said no discussions about buying the boat were recorded in Bridgecorp board minutes before the first purchase agreement.

In May 2002, a Bridgecorp meeting agenda included a typed note from Petricevic which said he had "negotiated to purchase" a boat.

Also attached to the agenda was an agreement to buy the Medici, which had been signed by Petricevic on behalf of Bridgecorp.

But the minutes of the meeting show that the Bridgecorp board rejected the idea, saying the "ownership of a vessel by Bridgecorp would send the wrong type of signal to the market ...".

The board went on to say that buying a boat would be a "bad look".

But, according to the SFO's summary of facts, Petricevic had already sent the purchase agreement to Japan.

Ten days after the board rejected the purchase, a deposit of $1.3 million went out of the Bridgecorp bank account to pay for the boat.

Between March and September 2002, 20 payments totalling more than $1.8 million were made by Bridgecorp and associated companies to buy the boat.

Bridgecorp's trustee - whose role was to protect investors' interests - was not told the boat was bought through a loan from Dominion Finance.

Crown prosecutor Brian Dickey asked the court to add six months to Petricevic's sentence to acknowledge the additional offending.

Petricevic's lawyer, Bruce Stewart, QC, said his client accepted that what he did was wrong, but said the boat was bought to entertain Bridgecorp investors during the America's Cup.

Judge Philippa Cunningham said Petricevic's offending was broadly similar to the offences for which he was sentenced in April.

Both sets of offending had involved withholding information from investors and were fraud-related.

After the court hearing, SFO chief executive Adam Feeley said that despite the small addition to the previous sentence, the public interest required the additional charges to be brought to prosecution.

"We understand that conviction on the additional charges may bring little solace to investors, but offending of this scale cannot be ignored."

In April, Petricevic was sentenced in the High Court at Auckland to six and a half years in prison after being found guilty of 18 charges of misleading investors and making false statements.

Bridgecorp collapsed in 2007, owing $459 million to investors.

The latest receivers' report says investors have been repaid only 3.5c in the dollar.