Guilty pleas in Five Star case

Five Star principal officer Neil Williams. Photo / Steven McNicholl

Guilty pleas have precluded the need for a trial of directors of the Five Star Group of companies and Five Star's principal officer on charges brought by the Registrar of Companies under the Financial Reporting Act and the Securities Act.

Director Marcus MacDonald and Five Star principal officer Neil Williams pleaded guilty to all the charges yesterday, the Ministry of Economic Development said.

They admitted three charges of misstatements in an advertisement or registered prospectus, one charge of false or misleading statements, and 36 charges of offering, distributing or allotting in contravention of the Securities Act.

Director Nicholas Kirk had admitted the charges in August, and in September director Anthony Bowden pleaded guilty to the same charges, except for the charge of false or misleading statements.

The charges are in relation to companies Five Star Consumer Finance, Five Star Finance and Five Star Debenture Nominee.

The Five Star Consumer Finance prosecution had been scheduled for a four-week trial in the Auckland District Court from October 26, with the Five Star Finance and Five Star Debenture Nominee prosecution scheduled for a three-week hearing from November 22.

Kirk and Bowden were remanded on bail to sentencing on October 14, with MacDonald and Williams remanded on bail to sentencing on December 22.

The case was the first of the major finance company prosecutions to be resolved, the ministry said.

The same four defendants are also charged with offences by the Serious Fraud Office under the Crimes Act. The charges are in relation to Five Star Consumer Finance, with the next scheduled hearing on October 28.

Receivers of Five Star Consumer Finance reported that, as at September 10, of $54.4 million invested, only $12.2m had been realised, leaving outstanding losses to investors at nearly $42.2m.

Receivers of Five Star Finance and Five Star Debenture Nominee Limited said that as at the same date, Five Star Debenture Nominee held $43.8m in secured advances to Five Star Finance. Five Star Debenture Nominee had realised assets of $156,522, so outstanding losses to investors were $43.6m.

- NZPA