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Charges have been laid against two Bridgecorp directors for allegedly taking millions of investors' dollars when the finance company had already collapsed.
Rod Petricevic and Rob Roest are facing charges laid in the Auckland District Court for alleged breaches of the Companies Act and Securities Act, while overseeing
the biggest finance company collapse in New Zealand history.
The company is in receivership and owes investors $460 million.
The Herald on Sunday understands both men have been accused of signing false director certificates to confirm the company had missed no payments to investors.
Bridgecorp also allegedly continued to collect money from investors until July last year, even though the company had allegedly defaulted on payments since February that year, a breach of the Securities Act.
If convicted, Petricevic and Roest face maximum penalties of $300,000 fines or five years in prison.
Neither could be contacted. Petricevic's lawyer, Greg Jones, was in Australia and did not return phone calls.
Court staff confirmed charges were laid last week and a July date set for the first appearance. The Herald on Sunday was refused permission to view the charges because Petricevic and Roest have yet to be served with the court documents.
A Ministry of Economic Development investigation, revealed by the Herald on Sunday last week, was launched after an Auckland investor queried why Bridgecorp had not paid the dividend on his investment.
When Bill Brewster's interest payment never arrived, his Muriel Dunn financial adviser approached Bridgecorp trustee Stewart Lockhart, who alerted the ministry.
The ministry began to investigate allegations the company was defaulting on payments while still receiving investors' money. Shane Keohane, head of the ministry's national enforcement unit, declined to comment and would not confirm charges had been laid against the Bridgecorp directors.
Auckland retiree Brewster told the Herald on Sunday much of his lifesavings was tied up in Bridgecorp, and other failed finance companies.
A $15,000 payment on Brewster's investment was due on June 21 last year. When Brewster rang Bridgecorp, he was assured several times that the money had been transferred to his bank. The money never arrived.
"We've made mistakes in life and we're trying to pick ourselves up." Another Bridgecorp investor, who spoke on condition of anonymity, invested more than $2m in June last year, nearly six months after Bridgecorp allegedly began defaulting on payments.
Now he has "lost everything".
The dentist and his wife invested $2m into Bridgecorp in June last year. A few weeks later, the finance firm collapsed owing almost $460m to 14,500 debenture investors.
"We may as well have thrown the money into the river," the man says.
As a result of losing everything, the man has been forced out of retirement and his wife has suffered a nervous breakdown.
Before investing the $2 million, the man said Bridgecorp sent him a letter saying interest had been paid on an earlier investment.
He never checked and the money was never deposited.
Accountancy giant PricewaterhouseCoopers was appointed as the receiver of Bridgecorp last July, and estimated early on that investors would recover between 25 and 74 per cent of the money. Since then, that figure has dropped to between 16 and 51 per cent.
Receivers John Waller and Colin McCloy started legal action to recover hundreds of thousands of dollars from the directors.
The court battle will focus on advances, salaries and bonuses paid before the company was placed in receivership.
McCloy said further civil action against the directors was pending and a second receiver report would be released at the end of June.
Bridgecorp is also being investigated by the Serious Fraud Office.
The SFO investigation centres around the $150 million unsecured loan to Barcroft Holdings, which resulted in Bridgecorp having twice as much exposure to Fiji's Momi Bay resort development as was disclosed in a prospectus.
