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).
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.
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.