Bridgecorp pair knew of missed payouts, says lawyer

(L- R) Former Bridgecorp directors Rod Petricevic and Robert Roest. Photo / Brett Phibbs

Three months before Bridgecorp collapsed, former directors Rod Petricevic and Rob Roest talked to their in-house lawyer about missing payments to investors, a court heard yesterday.

Petricevic, Roest and fellow director Peter Steigrad are on trial accused of making untrue statements in the prospectuses and offer documents of Bridgecorp and Bridgecorp Investments.

The trio face 10 Securities Act charges while Petricevic and Roest face an additional eight charges of knowingly making false statements that Bridgecorp had never missed interest payments to investors, or repayments of principal in offer documents.

The Financial Markets Authority, which is bringing the case against the directors, claims payments were missed from February 7, 2007.

Petricevic's lawyer Charles Cato said in his opening statements last year that his client was not aware of the defaults until a board meeting shortly before the Bridgecorp companies went into receivership in July 2007, owing $459 million to investors.

But Bridgecorp's former general counsel Jo Wong took the stand yesterday and said she talked to Petricevic and Roest about the missed payments in April of that year.

Wong was concerned because Bridgecorp's public offer documents, which she helped prepare, stated the company had never missed a payment.

"It was after the [March 2007] payment run was not made, I can't remember the exact date ... we generally discussed that there was a statement in the prospectus that payments had never been missed," she said.

Roest expressed the view that because Bridgecorp caught up on the payments, they were delayed rather than missed, she said.

Crown lawyer Brian Dickey also quizzed Wong yesterday about an email a colleague sent her before Bridgecorp missed the March payment run.

"Maybe we could tell them we have no money, can't pay our bills, are holding back payments, lying to investors and brokers about why their money hasn't been paid and I'm not confident that we can meet the March interest payments," the email read.

The defence then began their cross-examination of Wong, which will continue today.

Petricevic, Roest and Steigrad have all denied the allegations against them.

Former Bridgecorp director Gary Urwin originally pleaded not guilty and appeared in court, but he changed his plea in November and is awaiting sentencing in April.

His lawyer, David Reece, asked last year for a home detention report to be prepared, but Dickey said the Crown was seeking a term of imprisonment.

The charges carry a maximum penalty of five years in jail or a fine of up to $300,000.

Former Bridgecorp chairman Bruce Davidson was sentenced to nine months' home detention in October after he changed his plea to guilty.

He was also ordered to pay reparations of $500,000 and perform 200 hours' community work.