KEY POINTS:
Directors of failed vehicle hire-purchase finance company National Finance 2000 Ltd have been banned from acting as company directors.
Deputy registrar of companies Peter Barker ruled that Trevor Allan Ludlow, Carol Anne Braithwaite and Anthony David Banbrook mismanaged National Finance, among other companies, and it was that mismanagement which, at least partly, contributed to the company's failure.
The mismanagement allegations included reckless trading, failure to comply with its prospectus, breach of director's duties, and failure to maintain adequate books and records, the Ministry of Economic Development said today.
Barker considered submissions from the directors in response to the allegations and found that "both then and now, these directors do not understand their duties and responsibilities as company directors".
Previous court rulings had made it clear that directors cannot avoid their responsibilities merely by saying that they did not actively participate in decisions, weren't aware of them or relied on others.
Investors would have relied on the directors and the decisions they made, Barker said.
"A director must take steps to get in a position to monitor the company and to form independent judgment on the matters that should be considered by a director."
Prohibition notices were issued on October 14. Ludlow and Braithwaite are both prohibited for a period of four years and six months and Banbrook is prohibited for four years.
National Finance was put into receivership in May 2006 for failing to comply with its trust deed, and then put into liquidation in August this year.
Shortly after the failure of National Finance various related companies were also put into receivership and/or liquidation.
Those companies were vehicle traders (importers and wholesalers) and insurance brokers or were involved in the management of the National Finance group.
- NZPA
