Five Star directors back in district court

The case against the finance company directors charged after the collapse of the Five Star group is winding its way slowly through the district court, with the four making another appearance yesterday.

Marcus Macdonald, Anthony Bowden, Nicholas Kirk and 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 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.

In addition the Serious Fraud Office is investigating possible breaches of the Crimes Act by Five Star Consumer Finance.

Yesterday in the Auckland District Court the matter was remanded until February 2, when it will be confirmed whether the directors have been committed for trial.

The four are not required to appear on that date. Around two months later there will be a callover hearing, at which a trial date should be set.

It is not clear whether a trial can take place this year. The Five Star group collapsed in 2007 owing investors more than $90 million.

Last month Nicholas Kirk was struck off the Institute of Chartered Accountants' register for five years.

He was found guilty of conduct unbecoming an accountant and of breaching the institute's code of ethics, as a result of being banned as a company director.

Earlier last year Kirk, Macdonald, Bowden and Williams were banned from being company directors for five years.

Macdonald still holds a practising certificate as a lawyer and continues to work.

The Five Star case is one of a series of prosecutions brought by the Ministry of Economic Development against directors of failed finance companies.

Also making their way through the court system are charges against the directors of Bridgecorp, Nathans Finance and National Finance 2000.

Last month Clegg & Co owner Brian Clegg was sentenced to 12 months' home detention after pleading guilty to misleading investors, the company's trustee and the Securities Commission. Clegg admitted breaching the Securities and Companies Acts by signing untrue prospectuses, giving false or misleading reports and quarterly returns to Clegg & Co Finance's trustee, and attempting to deceive the Securities Commission.