Nathans director Roger Moses. Photo / Paul Estcourt
Nathans Finance director Roger Moses was satisfied with the process the company's offer documents underwent before they were registered, and believed them to be compliant with standards, a court heard yesterday.
Moses and fellow directors Mervyn Doolan and Donald Young are on trial for alleged Securities Act breaches. They have
pleaded not guilty.
Moses' lawyer, Paul Davison, QC, said yesterday that Moses had taken a "prudent" approach to governance of Nathans Finance, and had focused on reducing the inter-company debt of its parent company VTL.
But the Crown said the case was the result of "very significant conflicts between the position of the accused as directors of Nathans and their obligations in that capacity to protect the interests of Nathans' investors on the one hand, and their competing and conflicting interests as directors of VTL with its reliance on funds from Nathans".
The Crown alleges the directors made untrue statements in the registered prospectus and investment statement of December 13, 2006. It further alleges they made untrue statements when they signed a prospectus extension certificate on March 30, 2007.
Davison said Moses believed the management team was "getting it right" as well as Nathans' trustee as no questions were raised about the offer documents.
Davison said Moses - as Doolan's lawyer, Nathan Gedye, said - was entitled to rely on professional advice, adding there was no issue he was aware of that alerted him to the fact that further due diligence, review or inquiry into the compliance of the documents was necessary.
The Crown said any claim to a "belief which is based on reasonable grounds" was a claim to ignorance of a true position, which was the result of inattention or poor governance which due inquiry would have exposed.
High Court Justice Paul Heath said he was "staggered" to learn the directors, who had solicited money from the public, had knowingly let money go back to parent VTL to pay out maturities to another unrelated company.
The result of the lending practices meant there was no money for Nathans to pay its debenture holders interest or to repay principal except from the cash it obtained from new investors providing fresh funds to Nathans, ultimately to VTL. The case continues.
