Bridgecorp balances checked nine times a day, court hears

Rod Petricevic. Photo / APN

Times were so tight leading up to Bridgecorp's collapse its treasurer checked company finances up to nine times a day, a court has heard.

According to evidence examined yesterday, the company allegedly had only $45,000 to pay investors $1.9 million and pay staff salaries of $267,000 at one point in April 2007.

Bridgecorp collapsed around three months later, owing $459 million to 14,500 investors.

The Financial Markets Authority accuses former company directors Rod Petricevic, Rob Roest and Peter Steigrad of misleading investors and making untrue statements in the offer documents of Bridgecorp and Bridgecorp Investments.

The accused, who each face 10 Securities Act charges, deny the allegations. The trio's High Court trial began in October and is due to wrap up for the year today.

Fellow director, Gary Urwin, and the company's former chairman, Bruce Davidson, pleaded guilty to the charges.

Petricevic and Roest also face eight charges under the Crimes Act and Companies Act of knowingly making false statements in offer documents that Bridgecorp had never missed interest payments or repayments of principal to investors.

Former Bridgecorp treasurer John Welch said yesterday that from early 2007, he began monitoring the company's cashflow on a daily basis.

The Crown alleges Bridgecorp began missing payments to investors on February 7 of that year

By April, Welch was required to check and update cashflow four or five times a day, he said.

By May, he would do this up to eight or nine times each day, he said.

Earlier yesterday, the company's former investor services manager, Christine Todd, said Bridgecorp continued to take new investments, despite missing payments.

Todd said Petricevic and Roest were aware of the missed payments, but after cross-examination could not say for certain if the directors knew of them until April.

The directors signed a certificate, extending the life of Bridgecorp's offer documents, on 30 March 2007.

Missed payments were not disclosed to investors when it was signed.

Todd also told the court she was required to select which investors would take priority for payment if there were not enough funds to pay everything due on a given day.

After Bridgecorp missed a run of quarterly interest payments due at the end of March, Todd resigned.

Todd left because the worry from her job "wasn't worth it", she said.

"I'd had enough. The stress levels were too high. I couldn't sleep, I couldn't eat," she told the court.