Bridgecorp's former internal audit and risk manager, Indra Kumar, continued to be questioned as a Crown witness today over the "Barcroft transaction".
The Barcroft transaction constituted Bridgecorp's largest exposure to a single borrower.
It involved the sale of loans from Bridgecorp to Barcroft Holdings Ltd which was finalised on June 30, 2006.
The original amount Barcroft owed Bridgecorp was $76.8 million. This had grown to $90 million by November 30, 2006 and was more than $100 million before the company collapsed.
Barcroft is alleged to have had covert ties with Bridgecorp director Gary Urwin through trusts, and through parent company BHL, a company which Bridgecorp exercised considerable control over.
Despite the alleged link, Barcroft was listed as an unrelated company in the Bridgecorp prospectus distributed to investors after December 20, 2006.
Kumar said today he had several concerns with Barcroft's apparent related-party status at the time and had included these in his monthly audit reports.
He claimed to have discussed these reports with the company's chief financial officer, Rob Roest.
When called in early December to sign off on statements that would be included in the prospectus, he went directly to Roest and raised the issue again.
However, he was told Bridgecorp and Barcroft were not related parties and the pair "left it at that", he said.
Although Kumar signed off statements in the December prospectus relating to Barcroft, he refused to do so again in March.
Kumar claimed he only signed off in December because he believed the directors had access to loan documents he had not seen.
