Vance Arkinstall. Photo / Supplied
The savings and investment industry's main flag-bearer is facing up to five years in prison after the Securities Commission laid criminal and civil charges yesterday against the directors of Dominion Finance Group and sister company North South Finance.
Vance Arkinstall, chief executive of the Investment Savings and Insurance Association, was
one of six directors listed in the proceedings, which allege that offer documents and advertisements published by both companies misled investors.
The other directors are Rick Bettle, Terry and Ann Butler, Paul Forsyth and Robert Barry Whale.
Mr Arkinstall said he had no comment to make on the charges at this stage. But association chairman Sean Carroll admitted they were not a good look.
The association represents 20 major companies who look after more than $50 billion in savings and provide financial services for 1.5 million New Zealanders.
"It isn't a good look and I won't shy away from that," Mr Carroll said. "As an association, trust and confidence is a big thing. It's pretty hard to maintain with this sort of thing hitting the papers."
Mr Carroll said he had spoken to the other directors of the association, which was considering its position on Mr Arkinstall at the moment.
"It is tricky," he admitted.
Mr Carroll said he hadn't spoken to Mr Arkinstall yet because the chief executive was at a funeral in Auckland yesterday. But he hoped to speak to him today. "We need to talk about what the options are."
Mr Carroll said he would consider Mr Arkinstall's integrity but the organisation would also have to take its credibility into account.
He said he had been made aware of the possibility of legal action but it was only relatively recently that the matter had reached the point where it was headed to court.
"Ideally we would have acted before now but we haven't."
Mr Carroll said he now intended to move quickly on the issue.
"It is something we are taking very seriously."
Mr Butler said the directors would strenuously defend the charges.
Dominion was placed in receivership in September 2008 owing $176.9 million to around 5900 investors. Receivers expect that less than 25c in the dollar will be paid back.
Investors voted for North South Finance to be put into moratorium in December 2008. So far it has paid back around $54 million of the $102 million it owes the investors.
