Finance body boss to learn fate in next few days

Vance Arkinstall, CEO of the Investment Savings & Insurance Association, is facing criminal charges. Photo / Supplied

Vance Arkinstall will find out tomorrow or early next week whether he'll retain his job as head of a major financial industry body, after revelations he is facing criminal charges for his part in allegedly misleading investors in a failed finance company.

Arkinstall, who is the chief executive of the Investment Savings and Insurance Association, is one of six directors of Dominion Finance Group and sister company North South Finance Group facing criminal and civil charges brought by the Securities Commission.

The other directors are Rick Bettle, Terry and Ann Butler, Paul Forsyth and Robert Barry Whale.

The Dominion Finance Group went into receivership in September 2008, owing $176.9 million to about 5900 investors.

North South Finance went into moratorium in December 2008.

The charges relate to offer documents and advertisements published by both companies, which the Commission alleges were misleading.

ISI Association chairman Sean Carroll confirmed through a spokesperson that he had spoken to Arkinstall about his options today.

"The board is currently working through options off the back of those discussions," the spokesperson said.

A decision was expected late tomorrow or Monday at the latest, the spokesperson said.

Arkinstall said he would reserve any comment about his future at the ISI until then.

"As you'd understand, it's quite a sensitive issue at this point and it's just too early to know what the outcome might be.

"We'll work our way through it," he said.

Carroll earlier described the situation as "tricky".

"As an association, trust and confidence is a big thing. It's pretty hard to maintain with this sort of thing hitting the papers," he said.

The Commission alleges that Dominion Finance Group's offer documents and advertisements misled investors by misrepresenting the investment risks, in relation to related party transactions, lending standards, loan quality and impairment, liquidity and the company's overall financial position.

It also alleges that North South Finance's offer documents and advertisements misled investors in relation to related party transactions, liquidity and the company's overall financial position.

In addition, the Commission alleges the directors made false statements in the Dominion Finance Group registered prospectus dated September 2007, as amended by an extension certificate in December 2007 and the North South Finance registered prospectus dated September 2007, as amended by an extension certificate in December 2007.

The extension certificates stated the relevant company's financial position had not materially and adversely changed since the company's last balance date and that the prospectus was not misleading by failing to properly refer to adverse circumstances.

The Commission alleges this was false and that the directors' statements misled investors.

In addition, the Commission alleges that a quarterly newsletter of Dominion Finance Group and a letter to the investors of both Dominion Finance Group and North South Finance distributed during 2008 contained similar untrue statements about the financial position of the companies.

The criminal charges carry a maximum five year jail term or a fine of up to $300,000. The civil proceedings carry fines of up to $500,000 for each of the directors.

The case is due in court at the end of the month. The directors are expected to defend the charges.