Former Waipukurau lawyer Hugh Hamilton (62), who was Central Hawke’s Bay mayor for 6 years, was found guilty at the Auckland High Court on Friday on 14 charges arising out of the collapse of Belgrave Finance Ltd.
Justice John Faire remanded Mr Hamilton on bail until sentencing on 4 July.
Belgrave’s 2 Auckland-based directors both pleaded guilty earlier and were jailed for their roles, Shane Buckley for 3 years and Stephen Smith for 4 years. The alleged controller of the company, Ray Schofield, originally from Waipukerau but more recently from Whitford, was granted a stay of prosecution on the grounds of terminal illness, conditional upon review.
The Serious Fraud Office and the Financial Markets Authority brought the charges in a joint prosecution. They related to more than $12 million of loans Belgrave made to various entities related to Mr Schofield & the company between 2005-08.
Mr Hamilton, a legal advisor to Mr Schofield & the 2 directors, was found not guilty on 25 charges – 11 of false statement by a promoter, 11 Companies Act charges of making a false statement to a trustee & 3 theft charges.
Justice Faire said he was satisfied Mr Hamilton “had knowledge that Mr Schofield, Mr Smith or Mr Buckley, through their borrowing, were causing Belgrave to be in breach of the debenture trust deed.” Justice Faire also found beyond reasonable doubt that Mr Hamilton “intended to assist in the offending”.
Belgrave, incorporated in 2000, was placed in receivership in May 2008, owing 1000 investors about $22 million. It was wound up in April 2010, making it the 20th finance company collapse in 2 years.
Belgrave lent heavily on second mortgages for commercial & residential property developments, sourcing its funds primarily from the public in the form of debentures & convertible notes.
Receivers entered 3 of Mr Schofield’s companies in December 2008 – Kiwi Freeholds Queen Street Ltd, Kiwi International Hotel Queen Street Ltd & Schofield Kiwi Freeholds Ltd. He also owned the Kooralbyn Resort in south-eastern Queensland & the Airport Gateway Hotel at Mangere.
16 September 2011: SFO & new authority both lay charges over Belgrave Finance collapse
28 May 2008: Belgrave Finance into receivership
Attribution: Judgment, FMA release.