Lombard directors case adjourned

Sir Douglas Graham, former chairman of Lombard Finance. Photo / Paul Estcourt

Criminal proceedings brought against Lombard Finance and Investment directors Sir Douglas Graham, Bill Jeffries, Michael Reeves and Lawrence Bryant have been delayed again.

A decision was made in chambers at Wellington District Court this morning to adjourn the case for another two weeks.

The multiple charges of breaching the Securities Act - which carry a maximum penalty of five years imprisonment or fines of up to $300,000 - are expected to be defended.

They were laid in April by the Securities Commission and last postponed on August 20.

The Securities Commission has accused the directors of making false statements in a 2007 prospectus.

It is alleged investment risks were misrepresented, especially in relation to liquidity, the quality of the loan book, adherence to credit policies and the company's overall financial position.

The defendants have said they do not accept the accusations that company documents and advertisements misled investors.

Wellington-based Lombard Finance and Investments went into receivership in April 2008 owing about $127 million to 4400 investors.

As well as the criminal charges, civil proceedings relating to the same allegations were filed by the Securities Commission in the High Court at Wellington in April.

The civil action has been taken to lay the groundwork for affected investors to seek compensation.

Sir Douglas Graham, former chairman of Lombard Finance, was justice minister, minister in charge of treaty negotiations and attorney-general during the National government of the 1990s.

Bill Jeffries was a Labour government justice and transport minister before that.

- NZPA