Five Star Group directors plead guilty

Five Star Group directors plead guilty

The directors of the Five Star Group of companies Nicholas Kirk, Marcus Macdonald and Anthony Bowden and Five Star’s principal officer Neil Williams are charged by the Registrar of Companies for offences under the Financial Reporting Act 1993 and the Securities Act 1978. The offences are in relation to the companies Five Star Consumer Finance Ltd, Five Star Finance and Five Star Debenture Nominee Limited.

The Five Star Consumer Finance prosecution was scheduled for a four-week trial in the Auckland District Court from 26 October 2010.

The Five Star Finance and Five Star Debenture Nominee Limited prosecution was scheduled for a three week defended hearing in the Auckland District Court from 22 November 2010.

However, on 12 August 2010 the accused Nicholas Kirk pleaded guilty to all charges (listed below). On 17 September 2010 the accused Anthony Bowden pleaded guilty to the same charges, except for the charge of false or misleading statements. And on 4 October 2010 the accused Neil Williams and Marcus Macdonald both pleaded guilty to all of the charges.

The accused Kirk and Bowden have been remanded on bail to sentencing on 14 October 2010, and the accused Macdonald and Williams have been remanded on bail to sentencing on 22 December 2010.

This case is the first of the major finance company prosecutions to resolve.

Charges

• Three charges of misstatements in an advertisement or registered prospectus (pursuant to s58 of the Securities Act 1978)
• One charge of false or misleading statements (pursuant to s41 of the Financial Reporting Act 1993)
• 36 charges of offering, distributing or allotting in contravention of the Securities Act (pursuant to s59 of the Securities Act 1978).

Losses

The receivers of Five Star Consumer Finance have reported that, as at 10 September 2010, of the $54,429,000.00 invested by members of the public, only $12,246,525.00 had been realised. Therefore the outstanding losses to investors are $42,182,475.00

The receivers of Five Star Finance and Five Star Debenture Nominee Limited advise that, as at 10 September 2010, Five Star Debenture Nominee Limited held $43,764,246.00 in secured advances to Five Star Finance. The actual assets that Five Star Debenture Nominee Limited have realised is $156,522.00. Therefore the outstanding losses to investors are $43,607,724.00

Further charges

The same four defendants Nicholas Kirk, Marcus Macdonald, Anthony Bowden and Neil Williams are also charged with offences by the Serious Fraud Office under the Crimes Act. The charges are in relation to Five Star Consumer Finance. The next scheduled hearing for those charges is 28 October 2010.

ENDS

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