Archive | Dominion Finance

Dominion Finance directors reach $10 million settlement

Directors of Dominion Finance Group Ltd & subsidiary North South Finance Ltd have reached a $10.235 million settlement with liquidators, receivers and the Financial Markets Authority.

The sum, to be distributed to investors, means the authority will discontinue its civil claim against the directors for failing to perform their roles as directors and not taking adequate steps to ensure they were aware of the company’s true position.
The directors were Terry Butler, who died 2 years ago, his wife Ann Butler, Barry Whale, Rick Bettle, Paul Forsyth & Vance Arkinstall.
The Financial Markets Authority’s civil claim was stayed in 2010 pending the outcome of the criminal proceedings against the directors, who, apart from Mr Butler, were sentenced in 2013 and received varying sentences of home detention, community work and reparation payments of between $50-300,000.

Dominion Finance Group owed 5937 debentureholders $177 million and wholesale lenders were owed another $55 million when it went into receivership in 2008. North South owed debentureholders $31 million and wholesale lenders $15 million when it went into receivership in 2010.

Earlier story:
18 August 2013: 3 more Dominion Finance directors get home detention

Attribution: FMA release.

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3 more Dominion Finance directors get home detention

Dominion Finance Holdings Ltd chairman Rick Bettle & 2 other directors, Vance Arkinstall & Paul Forsyth, were sentenced to home detention on Friday on charges brought by the Financial Markets Authority.

Mr Bettle & Mr Arkinstall both pleaded guilty to 5 Securities Act charges, including making untrue statements in offer documents, and were sentenced to 10 months’ home detention & 200 hours of community work. Mr Bettle was also ordered to pay $90,000 in reparations.

Mr Forsyth pleaded guilty to 7 Securities Act charges, including making untrue statements in offer documents, and was sentenced to 11 months’ home detention, 200 hours of community work and ordered to pay $50,000 in reparations.

NZX-listed Dominion Finance Holdings’ majority shareholder & managing director, Terry Butler, died on 28 March as the trial of Paul Cropp, former chief executive of subsidiaries Dominion Finance Group Ltd & North South Finance Ltd, group non-executive director Barry Whale and an unnamed defendant came to an end. Mr Cropp was sentenced in May to 2 years 7 months in jail on 4 Crimes Act charges laid by the Serious Fraud Office arising from the companies’ collapse.

Mr Butler (65) was originally charged with them but was excused from the trial late last year because he had terminal cancer. Mr Butler’s widow, Ann, also a director, was sentenced on 14 June to 9 months’ home detention, 80 hours’ community work, and ordered to pay $300,000 reparation after admitting 3 charges brought by the Financial Markets Authority of distributing an advertisement containing an untrue statement and 4 charges of distributing a registered prospectus containing an untrue statement.

Mr Whale was sentenced to 12 months’ home detention, 250 hours’ community work and ordered to pay $75,000 reparation after admitting 7 charges relating to untrue statements in a prospectus, brought by the Financial Markets Authority.

The Butlers acquired Dominion Finance Holdings in 1987 and remained the majority shareholders up to its liquidation in 2009. One subsidiary, Dominion Finance Group, went into receivership in 2008 after the trustee appointed for the depositors declined to support a moratorium proposal. The second main operating subsidiary, North South Finance, entered a moratorium which continued until 2010. The parent company entered voluntary administration in 2008 and went into liquidation in 2009.

The 2 finance companies & their parent owed creditors about $400 million when they collapsed.

Attribution: Company release.

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Butler & 3 others charges over Dominion Finance related-party lending

Published 28 October 2011

The Serious Fraud Office has charged Dominion Finance Holdings Ltd majority shareholder & director Terry Butler & 3 others over $20 million of unauthorised related-party lending in the 4 years before its liquidation.

Mr Butler (64), director & lawyer Barry Whale (64), former chief executive Paul Cropp (48) and a fourth person subject to a non-publication order appeared in the Auckland District Court yesterday on a combined total of 14 charges under the Crimes Act of theft by a person in a special relationship. They were remanded without plea until Friday 9 December.

The charges related to operating subsidiaries of the listed holding company, Dominion Finance Group Ltd & North South Finance Ltd. The Serious Fraud Office has alleged the defendants participated in unauthorised related-party lending totalling over $20 million between 2004-08, in breach of the trust deeds entered into by the 2 subsidiary finance companies.

Terry & Ann Butler acquired Dominion Finance Holdings in 1987 and remained the majority shareholders up to its liquidation in 2009. Dominion acquired North South in 2005.

Both subsidiary companies suspended performance of their obligations to investors in July 2008 and proposed moratorium arrangements, but the trustee appointed for the Dominion Finance Group depositors, Perpetual Trust Ltd, declined to support the proposal and the company was put into receivership in September 2008.

At that time, Dominion Finance Group owed 5937 debentureholders $177 million and wholesale lenders were owed another $55 million.

The trustee acting for the North South depositors, Covenant Trustee Ltd, accepted the proposal and the moratorium continued until July 2010. At the time receivers were appointed, North South owed debentureholders $31 million and wholesale lenders $15 million.

Dominion Finance Holdings entered voluntary administration on 15 October 2008. Following an administrators’ recommendation, it was placed in liquidation on 3 February 2009 with an estimated deficit exceeding $115 million.

SFO chief executive Adam Feeley said the group in total was recorded as having unpaid creditors in the region of $400 million.

The Securities Commission (now the Financial Markets Authority) laid criminal charges and issued civil proceedings under the Securities Act against former Dominion Finance & North South directors. The Serious Fraud Office began its investigation last October after referral from the securities Commission.

Mr Feeley said these charges concluded the twelfth investigation into a finance company by the Serious Fraud Office, leaving 3 to be completed. Of those concluded, 8 had resulted in charges being laid by the SFO and another charged by another agency.

“The remaining investigations – South Canterbury Finance Ltd, Rockforte Finance Ltd & Hanover Finance Ltd – are well advanced and nearing conclusions.”

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Attribution: SFO release, story written by Bob Dey for the Bob Dey Property Report.

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