Archive | Nathans

2 Nathans directors jailed, personal asset statements sealed because of civil case

Published 5 September 2011

High Court judge Paul Health made reparation orders against the 3 Nathans Finance NZ Ltd directors sentenced last Friday, but ordered that all statements of their financial positions be placed in a sealed envelope on the court file because civil proceedings are under way.

He said the envelope could only be opened with leave of a judge, with notice to the Crown and all other offenders (a former director, John Hotchin, was sentenced earlier).

The sentences:

Roger Moses, jail for 2 years 2 months, $425,000 reparationMervyn Doolan, jail for 2 years 4 months, $150,000 reparationDonald Young, home detention for 9 months, $310,000 reparation.

Nathans Finance went into receivership on 20 August 2007 owing about $174 million to 7000 investors, and the receivers expected less than 10% of that to be recovered. The receivers have repaid 3.7% of secured debentureholders’ investments so far.

The receivers have a civil claim totalling $74.2 million against the 4 directors & Nathan’s auditors, with a maximum of $73.2 million claimed from the auditors, Staples Rodway, Hamilton.

The Institute of Chartered Accountants’ disciplinary tribunal censured Staples Rodway’s engagement partner for the Nathans audit, Christopher Hughes, in October 2010 after he pleaded guilty to charges relating to instances of the adequacy of the disclosure of related-party arrangements, failure to obtain sufficient audit evidence, the adequacy of documentation of the audit, errors of judgment and insufficient professional scepticism.

The tribunal ordered him to pay $163,467 costs and that he not undertake the audit of an issuer as defined in the Financial Reporting Act for 5 years.

7 Mach 2011: John Hotchin gets home detention, agrees to help prosecution in Nathans Finance case

24 December 2008: Securities Commission takes criminal & civil actions against Nathans directors

26 March 2008: VTL’s auditors stand down

27 January 2008: Doolan exits VTL board

7 November 2007: VTL suspended from NZX trading

6 September 2007: Nathans parent VTL completes funding arrangement to continue trading

22 August 2007: PWC partners take on Nathans as well as Bridgecorp insolvency 21 August 2007: Nathans Finance “at risk”, takes parent VTL down too

 

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

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John Hotchin gets home detention, agrees to help prosecution in Nathans Finance case

Published 7 March 2011

Justice Graham Lang sentenced former Nathans Finance NZ Ltd director John Hotchin, 51, in the Auckland High Court on Friday to 11 months’ home detention, 200 hours’ community service and payment of $200,000 in reparation.

The $200,000 of reparations Mr Hotchin offered will send him bankrupt. The judge said Mr Hotchin had also agreed to help the Crown in its prosecution of remaining defendants in their trial, due to start on Monday 21 March.

Justice Lang said his starting point for a sentence was 3 years’ jail, but reduced it for Mr Hotchin’s guilty plea, his genuine remorse, his reparation offer and his agreement to help the prosecution.

Mr Hotchin, brother of Hanover Finance Ltd director Mark Hotchin, pleaded guilty to 3 charges laid by the Securities Commission under section 58 of the Securities Act relating to statements made by Nathans in its 13 December 2006 registered prospectus & investment statement.

The commission alleged that statements concerning Nathans’ lending to related parties, the quality of its loan book, its loan management practices and its management of liquidity were untrue. It is also alleged the directors made untrue statements in a prospectus extension certificate in March 2007, to the effect that the company’s financial position had not materially & adversely changed since its last balance date and the statements hadn’t become false or misleading.

Nathans was chaired by Roger Moses and its parent, VTL Group Ltd (previous name Vending Technologies Ltd), by Gary Stevens, partners in Moses Stevens & Associates Ltd. VTL was founded by directors Mervyn Doolan & Mr Hotchin.

Nathans issued its 8th prospectus, for up to $100 million, in December 2006. It had $150 million of debenture stock in the market at that time.

Earlier stories:

24 December 2008: Securities Commission takes criminal & civil actions against Nathans directors

21 August 2007: Nathans Finance “at risk”, takes parent VTL down too

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

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Court displays contempt for transparency as it remands Nathans directors

Published 21 April 2009

The Security Commission’s case against Nathans Finance NZ Ltd’s directors began in a little blaze of glory on Christmas Eve, when the commission announced its intentions before at least one director was served.

 

When those who had been charged appeared in court in January, counsel for one of them, Paul Davison QC, lambasted the commission for taking away the defendants’ right to seek name suppression, aside from any other prejudice that might have been caused.

 

They were remanded to Monday 20 April for a pre-depositions hearing. But the New Zealand justice system doesn’t pay too much attention to basic transparency rules and agreement was reached last Friday for a remand through to June – dispensing with the Monday court call – and from there to a depositions hearing starting on 1 February 2010.

 

The Securities Commission laid criminal charges under the Securities Act and issued civil proceedings against Nathans directors Don Young & Roger Moses and former director John Hotchin. The one missing – described as “a fourth director believed to be resident in Australia” – was Mervyn Doolan, who founded the listed VTL Group Ltd (previously called Vending Technologies Ltd) with Mr Hotchin. Mr Hotchin resigned in April 2007 and Mr Doolan resigned from VTL in January 2008 but remained a Nathans director.

 

Earlier stories:

23 January 2009: Commission blasted for pre-Christmas announcement on Nathans prosecution

24 December 2008: Securities Commission takes criminal & civil actions against Nathans directors

21 August 2007: Nathans Finance “at risk”, takes parent VTL down too

 

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Attribution: Court call, story written by Bob Dey for the Bob Dey Property Report.

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