Festival fraud 'misjudgment'

By LOUISA CLEAVE

Sweetwaters director Daniel Keighley says he made a "massive misjudgment" in using forged documents to lure investors into pouring hundreds of thousands of dollars into his failed music festival.

The bankrupt businessman pleaded guilty to five counts of document forgery in the Thames District Court yesterday.

Among the documents Keighley admitted passing off as genuine was a forged Bank of New Zealand bank statement claiming the Sweetwaters account held $3.6 million.

Keighley said outside the court that he had made a "massive misjudgment in what I did" and that he was looking for "closure" on the issue.

His lawyer, Philip Morgan, advised him not to say anything else before sentencing on March 10, when a full summary of facts would be given.

Michael Smith, a lawyer representing a group of investors, Oasis Finance, said the forged bank printout was presented to his clients along with a document which claimed to be a trust agreement between the Keighley family and the BNZ.

It outlined an agreement under which ticket proceeds would be held until a threshold budget was reached, Mr Smith said.

"Partly on that basis [Oasis] invested," he said.

Keighley also admitted using an e-mail claiming to be from the Sweetwaters Website manager, Johnny Irons, and outlining ticket sales.

The e-mail, which the Herald obtained earlier this year, said almost 24,000 tickets had been sold by November 28.

A liquidator's investigation of the Sweetwaters company found ticket sales to the January event accounted for $996,000 - or the equivalent of 7114 three-day passes worth $140 each.

Keighley also admitted two other charges of using the forged printout to represent the balance of the Sweetwaters account with the BNZ.

The festival collapsed owing $2.7 million to creditors, including $1.7 million to 628 unsecured creditors, $400,000 to a preferential creditor and $545,000 to four secured creditors.

Mr Smith said Oasis Finance, one of the four secured creditors, was $300,000 out of pocket and it was unlikely the money would be recovered.

Judge Merelina Burnett ordered pre-sentencing and reparation reports.

Mr Smith welcomed this but said he doubted Keighley had any assets which could be used to repay the debts.

Another creditor, Robbie Barclay, said the guilty plea ended 11 months of stress for creditors but had not helped the music industry.

Mr Barclay, an event production manager, said the Sweetwaters debacle had made it difficult for up-and-coming promoters.

"For the established guys it's no problem ... but to start now promoting, everyone is a bit wary.

"There are probably a lot of guys out there thinking it's not a bad idea being a promoter. Once they start ringing around production companies they find everyone wants to be paid up front and this knocks them on the head."