Bridgecorp case at top of SFO's queue

Progress is being made on some of the biggest finance company collapses, says new SFO chief Adam Feeley. Photo / Brett Phibbs

The Serious Fraud Office expects to make a decision within weeks over bringing charges against the directors of Bridgecorp.

New SFO chief executive Adam Feeley has set his sights on meeting a March 31 deadline for decisions in all its finance company investigations and says headway has already been made in some cases.

"We have now made some very good progress on Five Star and with Bridgecorp," he said.

The SFO has not officially laid any charges despite it being two and a half years since the collapse of Bridgecorp, and longer for National Finance and Western Bay Finance.

BRIDGECORP

Feeley said he hoped to make a decision on Bridgecorp in the next few weeks.

"We are looking at making an internal decision on some of the transactions next week."

The office would then seek external legal counsel before making a final decision.

Bridgecorp collapsed in July 2007 owing 14,300 investors $459 million.

The Securities Commission has already brought criminal charges against directors Rod Petricevic, Rob Roest, Bruce Davidson, Gary Urwin and Peter Steigrad.

The commission says the directors misled investors by making untrue statements in the finance companies' investment statements and registered prospectuses.

Bridgecorp staff were allegedly told to lie to investors who complained about late interest payments.

The commission has also begun civil proceedings against the directors which may pave the way for investors to take further action.

The Companies Office has banned Petricevic and Roest from running any company in New Zealand for five years.

Petricevic was bankrupted last year.

FIVE STAR

Feeley said the Serious Fraud Office had a major breakthrough with Five Star after it struck a deal to gain access to information associated with the collapsed company.

That information was expected to be pivotal to its decision on whether to pursue further action.

The Five Star group collapsed in 2007 owing investors more than $90 million.

Five Star Consumer Finance directors Marcus Macdonald, Anthony Bowden, Nicholas Kirk and de facto director Neill Williams face charges under the Securities and Financial Reporting Acts for allegedly making false and misleading statements to investors.

Macdonald, Bowden and Kirk are also charged with offering securities to members of the public without a registered prospectus, investment statement or trustee appointed.

The four men have been banned as company directors for five years and Kirk has been struck off the Institute of Chartered Accountants' register.

The receivers of Five Star Consumer Finance are bringing civil action against them for breaches of duty owed to the company, and out-of-pocket investors in Five Star Debenture Nominees are also looking at action.

CLUB FINANCE

Feeley also confirmed an SFO investigation into car finance company Club Finance.

Club Finance was funded through a complicated investment scheme called the First Step Trusts.

Club Finance is part owned by a company associated with Doug Somers-Edgar - the founder of financial advisory group Money Managers, which sold the First Step Trusts to the public.

First Step has written off $60 million on its investment in Club Finance. Trustee company Calibre Asset Services reported the finance company to the SFO last year.

Feeley said initial research had led the SFO to widen its search beyond ClubFinance.

"We are looking at the transactions more widely and some of the other parties involved."

But the investigation was still at an early stage.

NATHANS FINANCE

It was too soon to comment on the SFO's investigation into Nathans Finance, Feeley said.

Nathans Finance went into receivership in August 2007 owing $174 million to 7000 investors.

The Securities Commission alleges that directors John Hotchin, Donald Young, Kenneth Moses and Mervyn Doolan misled investors by making untrue statements in the company's December 2006 registered prospectus and investment statement.

In addition, the directors face the same civil proceedings as the Bridgecorp directors. It could see them each forced to compensate investors up to $500,000.

The SFO has also previously confirmed it is investigating National Finance, Clegg and Co and Waipawa Finance.

* Adam Feeley

Chief executive of the Serious Fraud Office (SFO).

Joined the SFO in November last year.

Was previously chief executive of the Eden Park Redevelopment Board.

Before that was Crown Minerals group manager at the Ministry of Economic Development.

Other roles have included general manager of Baycorp Holdings and Ministry of Commerce national manager business registries.

Practised as a solicitor in the Department of Trade and Industry in London, and in New Zealand at the Department of Justice and at Bell Gully.

Gained a bachelor of laws with honours from Canterbury University.