Charges dropped in finance trial blowout

Paul Bublitz sits in the High Court at Auckland during the opening morning of the trial against him and three colleagues from finance companies Viaduct Capital and Mutual Finance.

More charges against the accused in the final failed finance company case have been dropped after a blowout in the length of the trial.

It is the third time the Viaduct Capital and Mutual Finance prosecution has been whittled back in a High Court case that was originally expected to take 12 weeks when it started in August but may now stretch on until the middle of next year.

Paul Bublitz, Bruce McKay, Richard Blackwood and Lance Morrison are on trial in Auckland before Justice Mark Woolford.

McKay and Blackwood served as directors of Viaduct Capital while Morrison and Bublitz were on Mutual Finance's board. The firms went into receivership in 2010, owing investors $17 million.

Bublitz, according to prosecutors when the trial began, allegedly used the two finance companies to support his property investments.

The other defendants in the case were accused of helping him.

The men deliberately misled investors and potential investors of Viaduct and Mutual by failing to disclose a series of related party transactions entered into for their benefit rather than the benefit of the finance company, the Crown alleged when the case began.

Because of the length of the trial and concerns over the way it was being run, the defendants recently made a bid to permanently park the prosecution against them.
Justice Woolford declined their application this afternoon but went on to discharge the defendants on 34 of the charges originally brought against them.

Bublitz now faces 15 charges out of the 49 he denied at the trial's outset while Blackwood faces seven of the original 28 laid against him.

McKay faces eight of the 41 charges he denied in August and Morrison is still being tried on two of the original seven in the case.

The Financial Markets Authority, which investigated the case, said this evening that the charges were dismissed because of "concerns about the size of the Crown's case and in particular the hearing time and Court resource that will be required to deal with it in its present form".

"In doing so, the FMA's view is that the Crown maintains these charges were properly brought and that there is sufficient evidence to support them. The Crown also considers that notwithstanding the dismissal of these charges, the misconduct alleged against the defendants is still adequately represented by the remaining charges."

When the prosecution resumes tomorrow, the trial will be into its 71st day - which is the same amount time spent on the entire South Canterbury Finance case last year.