Two already jailed Capital+Merchant finance directors have this morning plead guilty to separate charges laid by the Financial Markets Authority.

Wayne Douglas and Neal Nicholls, the founding directors and beneficial owners of Capital+Merchant, were found guilty in July last year of three charges of theft by a person in a special relationship.

In a case brought by the Serious Fraud Office, both men were each jailed for seven and a half years, the longest sentences given to failed finance companies bosses to date.

Douglas and Nicholls were originally due back in the High Court at Auckland this week for a separate case where the FMA said the men mislead investors after making untrue statements in offer documents.


Nicholls faced two Securities Act charges for signing a registered prospectus in December 2006 that included an untrue statement and for a prospectus first distributed in September 2007.

He also faced a charge for distributing an advertisement that included an untrue statement.

Douglas faced two charges relating to statements in a prospectus and an advertisement that included an untrue statement.

The men appeared this morning in prison garb of grey t-shirts, pants and jandals rather than the suits they wore at the SFO trial.

But the duo pleaded guilty today and were convicted on these charges before Justice Patricia Courtney. The charges the men pleaded guilty to carry a maximum penalty of five years imprisonment or fines of up to $300,000.

A sentencing date has not been set.

While they pleaded guilty to these charges, the pair have filed for leave to appeal in the Supreme Court in the SFO case.

If the case goes that far it will be the first time a criminal case involving former finance company directors has reached the country's highest court.

Their bid at the Court of Appeal was rejected in December.

Capital+Merchant collapsed in 2007 owing $167 million to about 7500 investors. No funds are expected to be recovered.

Former C+M chief executive Owen Tallentire, who was jailed for five years in the SFO case, was also facing charges laid by the FMA but pleaded guilty last month.

Two other former C+M directors, Robert Gordon Sutherland and Colin Gregory Ryan, also pleaded guilty to charges in the FMA case last week.

These three men are due to be sentenced on March 15.