Mark Bryers was never going to be sent to jail for not complying with company regulations such as keeping minutes, filing accounts on time, not attending a creditors’ meeting – even though these minutes, accounts & creditors were of companies in a listed group that funnelled multi-millions of dollars out of the bank accounts of small investors into schemes from where much of that money seems to have disappeared into thin air.
After scores of charges were whittled down to 34, the former chief of the now-collapsed Blue Chip Financial Solutions group faced just one charge with a potential jail sentence. The prosecutor recommended community work on that, while defence counsel said that, because Mr Bryers lived in Sydney, that would be an inefficient use of the Official Assignee’s limited resources and the penalty should be measured by fines.
2 hours after the sentencing hearing began in the Auckland District Court this afternoon, Judge Chris Field (right) sentenced Mr Bryers, 52, to:
75 hours’ community work on one charge (failing to attend the Bribanc Property Group Ltd creditors’ meeting)fines of $16,875 + court costs of $130 on each of 2 chargesfines of $930 + court costs of $130 on each of 4 charges.
The judge said another 27 charges should be regarded as “aggravating features” of the 2 lead charges, and on those he convicted & discharged Mr Bryers.
That produced a total sentence of $37,470 in fines, 75 hours of community work & $780 in court costs.
How do you arrive at these numbers?
Crown prosecutor Mark Woolford said there were “a large number of people in court (to see Mr Bryers sentenced) who have suffered enormously because of Blue Chip companies”. But he said the informant (the Ministry of Economic Development’s national enforcement unit, prosecuting for the Securities Commission) “cannot point to any link between the charges to which Mr Bryers has pleaded guilty and the losses by the public. The charges are not fraud charges.”
Mr Woolford said there were 4 categories of penalty – the 2 lead charges carried a maximum penalty of $100,000 each, the one on which a 2-year jail term was possible carried an alternative of a $50,000 fine, the bulk of the charges carried $10,000 maximum penalties and the charges relating to the Swordfish Lodge Ltd watershed meeting (when it went into administration) carried maximum penalties of $5000.
As a comparison, Mr Woolford gave the example of Kevin Doddrell, who was chief executive of Zazu Ltd, the company that took on the Ansett NZ Ltd business (Ansett became Tasman Pacific Airlines Ltd and traded as Qantas NZ). On receivership in 2001, the companies owed creditors over $100 million. Mr Doddrell pleaded guilty to 3 charges under the Financial Reporting Act. At sentencing in 2003, Judge Fred McElrea said Mr Doddrell wasn’t being held accountable for the whole collapse, that $45,000 represented an adequate starting point (on charges with a maximum penalty of $100,000), and said courts commonly gave discounts of 20-30% for a guilty plea. He reduced the fine to $32,000 + $10 court costs.
Mr Woolford said $45,000 was warranted on Mr Bryers’ 2 lead charges, suggested an uplift of $20,000 under the totality principle to take account of the 27 charges with maximum penalties of $10,000, and added $5000 for the watershed meeting charges – a total of $70,000. He added a suggestion of 100 hours’ community work for the missed creditors’ meeting. From that, Mr Woolford said a 20% discount could be given for early guilty pleas.
Mr Bryers’ lawyer, Aaron Lloyd, said the starting point should be $50,000, not $70,000, and all penalties should be by way of fine. He said Mr Bryers didn’t attend the Bribanc creditors’ meeting “because he did not receive notification of it. Any suggestion that he left (the country) with the intention of avoiding the meeting is denied by him”. Mr Bryers went to Sydney for a period which included that meeting. He received notice of the watershed meeting “but was concerned about his safety and advised he wasn’t going to be attending”. On the overall filing of accounts, it was normal for the companies’ accountants to do that but he accepted it was his responsibility to ensure it happened.
Mr Lloyd said early guilty pleas & remorse were among factors to be taken into account. Remorse was raised only once in oral submissions and Mr Lloyd didn’t elaborate on it beyond saying Mr Bryers “expressed genuine remorse for his actions”. Although Judge Field mentioned $157 million as one of the figures he’d seen for New Zealand losses through the Blue Chip schemes, and Mr Woolford said it may not have been an accurate one, Mr Bryers exported a very similar business model to Australia, where the renamed parent company, Northern Crest Investments Ltd, continues to market it.
Perhaps ironically as far as New Zealand investors now see Blue Chip, Mr Lloyd quoted a letter from the chairman of Northern Crest in Sydney, Marc Wilson, who said Mr Bryers “staying in New Zealand (to do community work) would harm Nor