A former mayor prepared loan documents and gave advice on $12.6 million in "unlawful advances" of Belgrave Finance investor money to the now-collapsed company's "shadow director", the High Court was told yesterday.
These alleged related-party loans, which investors were not told about, created a large exposure to a single debtor - which is seen as a key contributor to Belgrave Finance's 2008 collapse that left almost 1300 people owed $20.5 million.
The former Central Hawkes Bay mayor and Waipukurau lawyer who allegedly helped this lending happen, Hugh Edward Staples Hamilton, has pleaded not guilty to 17 charges of theft by a person in a special relationship as well as charges of making false statements.
Hamilton is a former partner of DAC Legal and gave legal advice to Belgrave Finance and its alleged "shadow director" Raymond Schofield until its receivership.