Feltex court case over- August decision due

Photo / Hawkes Bay Today

Feltex's five directors will have to wait until the beginning of August for a decision on whether they will be found not guilty for alleged breaches of the Financial Reporting Act, a court heard this morning.

The directors, Tim Saunders, Peter Thomas, Peter David Hunter, John Feeney and John Hagen have pleaded not guilty to allegations the company did not disclose certain details in Feltex's interim financial accounts to December 31, 2005.

Auckland District Court judge Jan Doogue reserved her decision today after the defence put forward its final submissions.

The Crown alleges the directors failed to disclose that Feltex was in breach of a A$100 million loan agreement with ANZ and wrongly classified that debt as non-current.

It should have been classified as current, meaning the debt was on call, in the company's half-yearly interim financial statements to December 31, 2005.

The directors maintain at the time the accounts were signed by the board and registered they believed compliance had been met under the appropriate accounting standards and laws.

Feltex hired accounting firm Ernst & Young to review the accounts, at a cost of A$113,000 to the company.

The firm failed to see that those disclosure details were left off of the company's balance sheet.

Yesterday, defence lawyer Paul Davison, QC, said any suggestion the details were deliberately left off to improve the appearance of the company's financial position and accounts was misleading and unfounded.

The prosecution says the responsibility ultimately lies with the directors, that the directors should have done more to ensure the accounts met compliance under International Financial Reporting Standards.