Finance company boss Ludlow pleads guilty to theft

Trevor (Allan) Ludlow File photo

The former director of failed car finance company National Finance 2000 has pleaded guilty one charge of theft in the Auckland District Court.

Allan Ludlow faces seven charges laid by the Serious Fraud Office relating to the misuse of investor funds during his time as director.

National Finance, whose core business was car finance, was placed in receivership in May 2006, owing 2000 investors $24 million.

Ludlow admitted breaching the company's trust deed by making a related party loan of $125,000 to Universal Marketing, which was incorrectly recorded as a dealer loan, breaching the company's trust deed.

SFO lawyer Nick Williams said the advance, made to Mike Pearce who, was at the time in a relationship with Ludlow's step-daughter, was not disclosed in the quarterly Directors' Certificate to the Trustee.

"Mr Ludlow intentionally used investor funds for his own purposes and to fund
other unauthorised business and personal ventures. His use of the funds was
not authorised by the Trustee and amounts to theft in law."

"It is a classic case of the use of a finance company by its director as a personal piggy-bank," he added.

Ludlow faces six other charges of theft by a person in a special relationship and one of false accounting.

Ludlow and fellow directors Carol Braithwaite, Anthony Banbrook are also due to face trial in August on Financial Markets Authority charges for alleged financial reporting breaches.

His co-accused former National Finance accountant John Gray pleaded guilty to theft and false accounting charges in the Auckland District Court last year. He was later sentenced to nine months' home detention.