Published 22 December 2010
2 directors of Five Star Consumer Finance Ltd, Nick Kirk & chairman Marcus MacDonald, were sent to jail yesterday on charges brought jointly by the Serious Fraud Office and the Ministry of Economic Development’s national enforcement unit.
The third director, Anthony Bowden, was sentenced to home detention & community service. General manager Neill Williams, who prosecutors argued was effectively a director, also pleaded guilty but had his sentencing adjourned for a disputed-facts hearing to be held in March.
Judge Rod Joyce sentenced Mr Kirk to 2 years 8 months in jail, Mr MacDonald to 2 years 3 months, on Crimes Act charges relating to the theft of $50.1 million by a person in a special relationship. They were sentenced to concurrent one-year terms on Securities Act charges brought by the national enforcement unit, and ordered to pay reparation of $92,756.
Mr Bowden was sentenced to 9 months’ home detention & 300 hours’ community service on Securities Act charges.
SFO chief executive Adam Feeley said in a post-sentencing release: “The SFO is pleased with the delivery of a custodial sentence. This is the first sentencing in relation to a major finance company collapse, and continues the clear message from the courts as to the seriousness of white-collar crime.”
Five Star Consumer Finance Ltd went into receivership in August 2007 and other companies in the group followed it into receivership or liquidation. 2300 investors held $54 million of secured debentures when Five Star Consumer Finance collapsed and the company had 11,200 loans totalling $65.5 million.
The receivers have issued civil proceedings against the directors, but these were adjourned until the criminal proceedings were completed. They’re currently set down for trial starting 12 March 2012. The receivers have repaid 22.5c:$1 to secured creditors.
Mr MacDonald was a consultant to law firm Phillips Fox, which was the solicitor to Five Star, and was a director of numerous companies, including Equity Investment Trust Co Ltd, First Kiwi Mortgages Ltd & Retail Franchisers Ltd, and was a former director of Porter Group Ltd, Remarkables Park Ltd & Shotover Park Ltd.
Mr Kirk was a director of First Kiwi Mortgages, Leasing Principals Ltd, Linford Ltd, Nest Egg Loans Ltd (removed from the register in 2007), Retail Franchisers, Retirement Nest Egg Ltd (removed from the register in 2007), Richmond Park Properties Ltd, Storage & Distribution Ltd, Vintage Finance Ltd, Vintage Rentals Ltd, Westminster Rentals Ltd & Whyte Adder No 18 Ltd.
Mr Bowden, an accountant, was a director of numerous companies, including Andromeda Investents Ltd, Ethical Agents, Equity Investment Trust Co and International Finance Trust Co (NZ) Ltd.
All 3 directors were banned from managing a company for 5 years from 23 March and Mr Williams was also banned for 5 years, starting on 29 May.
Earlier stories:
29 October 2010: MacDonald pleads guilty to Five Star Finance theft charges
30 November 2009: Five Star directors remanded on new charges
13 November 2009: 5 Star Finance quartet face more charges
21 June 2009: Five Star’s de facto director joins actual directors on banned list
8 April 2009: Five Star directors get 5-year ban
4 August 2008: 5 Star Finance quartet remanded
9 July 2008: Five Star directors face prospectus charges
U: The names behind the action, the week to 15 June 2008, part 1, Debenture company gets Five Star Finance wound up
30 August 2007: Five Star Finance latest to fold
Want to comment? Go to the forum.
Attribution: SFO release, phone interview, story written by Bob Dey for the Bob Dey Property Report.