The Registrar of Companies says he won't be appealing this month's court ruling to acquit failed carpet company Feltex's five directors of Financial Reporting Act charges.
Former Feltex chairman Tim Saunders, former chief executive Peter Thomas, John Feeney, Peter David Hunter and John Hagen successfully argued that although they signed
off on accounts that did not disclose the fact the company in breach of conditions around a A$100 million bank loan or that the loan was on call, they believed the statements were in order before they endorsed them.
Auckland District Court judge Jan Doogue said the directors were entitled to rely on the advice from auditors Ernst and Young that the accounts complied with accounting standards.
Registrar of Companies Neville Harris said after reviewing the court decision and seeking legal advice, he had decided not to appeal the decision.
An appeal can be brought on issues of law, but not on factual matters.
Feltex was floated on the New Zealand stock exchange in May 2004 and raised $254 million.
But despite the promise of growth, the company collapsed two years later.
The ANZ, which was owed $135 million, placed Feltex into receivership, and days later its assets were sold to rival firm Godfrey Hirst.
In 2007 the Securities Commission investigated the Feltex IPO, and later disclosures and reports.
It referred breaches of the Act to the Registrar, who investigated.
"In the course of the investigation I obtained expert external accounting advice and referred the matter to the Crown Solicitor. Further legal advice was taken before the laying of charges in December 2008" Harris said.
- NZ HERALD ONLINE
