Bridgecorp boss ordered to repay 'excessive' salary

Robert Roest maintains that Bridgecorp still owes him a golden handshake that would cover what he owes. Photo / Richard Robinson

The High Court has ordered Bridgecorp director Rob Roest to repay $313,906 in excessive salary and a bonus he received in the months leading up to the failure of the finance company.

However Roest, who faces criminal charges relating to Bridgecorp's demise alongside fellow executive director Rod Petricevic, declared himself bankrupt on Thursday.

The court also says he must pay interest of $56,000 up to the date of his bankruptcy and $72 a day thereafter.

The action was brought by the receivers of Bridgecorp Management Services, the part of the Bridgecorp group responsible for employing Roest as finance director.

Bridgecorp collapsed in July 2007 owing 14,300 investors $459 million. Latest estimates are that investors will get back less than 10c in the dollar.

Yesterday Justice Pamela Andrews agreed with receivers PricewaterhouseCoopers that the $543,000 Roest earned between August 2006 and June 2007 - made up of salary, back pay and a $155,000 performance bonus - had been paid without the formal authority of the company's board and exceeded what could be considered fair.

She said his $388,074 base salary was well above average for that kind of role.

"I accept the evidence that reasonable fixed remuneration as finance director for a company with the profile of Bridgecorp would have been $250,000."

Adjusted for the 11-month period in question, the figure would be $229,000, she said.

Bridgecorp chairman Bruce Davidson, who was a member of the company's remuneration committee, gave evidence under threat of subpoena.

In an affidavit he said he had no record or recollection of the board ever considering Roest's remuneration package or whether he qualified for a bonus, Justice Andrews said.

In the absence of any formal employment agreement "there was no basis for any significant performance bonus to be paid [to Roest]", she said.

Davidson is facing charges under the Securities Act along with Roest, Petricevic and Bridgecorp's two other directors, Gary Urwin and Peter Steigrad, for allegedly misleading investors by making untrue statements in the finance company's prospectus.

Roest and Petricevic also face other charges and the Securities Commission has issued civil proceedings against all five directors.

The receivers' action against Roest echoes their moves last year regarding Petricevic's remuneration.

After months of legal wrangling Petricevic was bankrupted over a $661,000 personal tax bill the company paid for him in September 2006.

Petricevic had argued the amount was more than offset by a $1.1 million golden handshake due to him.

But Associate Judge David Robinson ruled that dispute was a matter for the Employment Relations Authority.

Similarly Roest argued that Bridgecorp owed him $672,000 in pay and other benefits. Justice Andrews also said that should be argued before the ERA or Employment Court.