Guilty Bridgecorp director bailed ...to Sydney

Former Bridgecorp director Gary Urwin will stay with his son in Sydney until he is sentenced next month, and will spend his time tidying up his affairs, his lawyer says. Photo / Steven McNicholl

A former director of failed finance company Bridgecorp and colleague of Rod Petricevic has pleaded guilty to 10 charges of making untrue statements in documents and, in an unusual move, has been bailed to a home in Australia.

Gary Kenneth Urwin pleaded guilty yesterday in the High Court at Auckland to the charges, which related to offer documents of Bridgecorp and Bridgecorp Investments.

Bridgecorp collapsed in 2007 owing $459 million to 14,500 investors.

Urwin has been remanded on bail to his son's North Sydney property to await sentencing next month, and could face a prison term.

The breaches of the Securities Act carry a maximum penalty of five years' imprisonment or a fine of up to $300,000.

Urwin's lawyer, David Reece, asked during yesterday's brief appearance for a home detention report to be prepared, but prosecutor Brian Dickey said the Crown would oppose home detention.

"We will be seeking a term of imprisonment," he said.

Urwin had been on trial with the three other Bridgecorp directors, Petricevic, Rob Roest and Peter Steigrad.

All four denied the charges, but Urwin yesterday changed his plea to guilty.

In his opening address when the trial started last month, Mr Dickey told the court that Urwin and the others must have known about Bridgecorp's deteriorating finances.

He said the directors lied to prospective investors in Bridgecorp's term investment prospectuses, registered on December 21, 2006, which reported the company's financial position for the year to June 30, 2006.

He said reinvestments and new investments had declined, the company's costs had increased, and market conditions had worsened.

By failing to state this in the offer documents, the directors had misled investors.

An extension certificate, dated March 30, 2007, said the company's financial position had not adversely changed from the statement in the prospectuses.

But Mr Dickey said that was not the case and all the directors knew it.

The company's liquidity had declined, and it had not met its cash-flow forecasts.

Mr Dickey said the information was emailed to all directors and it "ought to have been apparent to the directors that Bridgecorp had insufficient cash flows to continue operating as a finance company".

The trial adjourned last month and will re-open on Monday to hear the charges against the other three former directors.

It is set down to run until the court closes for the year and will begin again on January 23. It is likely to run until March.

Outside court, Urwin said he had no comment to make until after sentencing.

Mr Reece said Urwin would "tidy up his personal affairs" during his time in Sydney.

He said his client regretted the failure of Bridgecorp.

"He certainly wasn't working for its demise."

Urwin had "some strong mitigating factors" which would be brought out at sentencing.

He is also a member of the New Zealand Institute of Chartered Accountants. A spokeswoman for the institute said he would face a disciplinary hearing.

Last month, former Bridgecorp chairman Bruce Davidson pleaded guilty to misleading investors.

He was sentenced to nine months' home detention and ordered to pay reparation of $500,000, to be distributed to investors.