Three directors of National Finance 2000 - whose May 2006 collapse was the first in a series of 25 finance company failures - are to face criminal charges carrying potential penalties of hefty fines and up to five years in prison.
Trevor Allan Ludlow, Anthony David Banbrook and
Carol Anne Braithwaite would face charges in the Auckland District Court relating to untrue statements in the company's registered prospectus and failure to comply with financial reporting standards, said Registrar of Companies Neville Harris.
The Serious Fraud Office is also conducting a separate investigation into National Finance, and the agencies had been liaising as closely as appropriate, said Harris.
The defendants are due to appear on October 23.
The Companies Office alleges the directors failed to disclose material transactions between National Finance 2000 and related parties.
The trio are also charged under the Securities Act for stating that they had made proper and adequate provisioning for bad debts and that loans were secured by general security agreements when this was not the case.
Ludlow is facing additional charges under the Financial Reporting Act for making false or misleading statements in relation to bad debt provisioning, related party lending and general security agreements.
The Securities Act charges carry a maximum prison term of five years or a fine of up to $300,000. The Financial Reporting Act charges carry a maximum fine of $100,000. The Financial Reporting Act charges faced by Ludlow carry a maximum prison sentence of five years or a fine of $200,000.
National Finance 2000 collapsed in May 2006 owing $25.5 million to 2026 investors.
