The directors of the failed Five Star group of companies have been banned from board or management positions with New Zealand companies for five years.
Marcus MacDonald, Nicholas Kirk and Anthony Bowden were the directors of Five Star Consumer Finance, Five Star Finance and Five Star Debenture Nominees which allcollapsed in the second half of 2007 leaving investors more than $90 million out of pocket.
The ban, announced yesterday by Deputy Registrar of Companies Peter Barker, has been made under the Companies Act provisions which say anyone who has been a director of more than one failed company within five years must satisfy the registrar that they were not at least partly responsible. The three men were unable to do so.
Barker found their failings to be "serious and fundamental".
The largest company in the group, Five Star Consumer Finance collapsed in late August 2007 owing $63 million, including $54.43 million to debenture holders.
Receiver Richard Agnew of PricewaterhouseCoopers has said most loans in Five Star's commercial book, which accounted for $41 million of the company's $65 million in lending, were made "outside normal commercial lending practices".
Many of the loans were made to parties related to Five Star Consumer Finance by way of common directors.
Agnew has said secured debenture holders will get about 25c in the dollar of their principal. Any further payments depend on the outcome of ongoing court action. Five Star's directors also face criminal charges under the Securities Act.
