Access woes go back for years

Defunct discount sharebroker Access Brokerage suffered accounting discrepancies dating back to at least June 1998, according to the second liquidators' report filed with the Companies Office last night.

The report also says, among other things, that expenses were understated and assets overstated in the firm's ledgers and management accounts.

Further investigation might show the accounting problems went back even further, said liquidators Michael Stiassny and Brendan Gibson, of Ferrier Hodgson.

The report did not delve into who might be responsible knowingly or otherwise for the discrepancies.

It pointed out that a decision on whether the liquidators would pursue legal action against any directors for reckless trading and inadequate book-keeping was on hold as the potential costs were weighed against any gains.

Meanwhile, NZX chief executive Mark Weldon last night confirmed a Business Herald report that disciplinary procedures would be brought against Access director Peter Marshall.

Marshall, through his lawyer, said he had not seen the report and, as a result, was unable to comment.

Weldon declined to discuss the likely financial penalties sought, saying that was inappropriate until Marshall had been informed of the magnitude of the penalties.

This will happen in the next few weeks and Weldon said nothing had been discounted regarding action against other parties.

The Securities Commission and Serious Fraud Office have also investigated the collapse but neither will comment on their progress.

In September, commission chairwoman Jane Diplock said her organisation would look into Access' banking arrangements, NZX's audit of the firm and any wider issues.

Access, owned by former Olympic Games boss Bill Garlick, went into liquidation on September 6 - after a $5 million deficit in client funds was uncovered. He said last night he was unable to comment.

Thousands of Access clients avoided loss as the Bank of New Zealand underwrote the shortfall on the firm's trust account.

The liquidators' initial report, in September, showed the firm had been using client funds to run the company for some time, creating a shortfall in its client trust account.

Gibson then estimated a loss to all of the company's creditors and claimants of about $3.7 million before liquidation costs. It is still unclear whether this will be fully recovered.

NZX tipped as possible target

The NZX may itself be the target of action. The liquidators' report notes the Bank of New Zealand was considering trying to recover money from NZX, which had oversight of the Access operations.

The BNZ, along with the NZX, paid out money missing from Access accounts to the broking firm's clients.

NZX chief executive Mark Weldon said the exchange would pursue any and all counterclaims. He declined to specify what these might be.