Quick verdict promised for Nathans trio

Nathans director Roger Moses. Photo / Paul Estcourt

Justice Paul Heath promised a quick verdict for the former directors of Nathans Finance as their marathon 12-week trial on alleged Securities Act breaches drew to a close in the High Court at Auckland.

Justice Heath said that because of the stress the trial had placed on the three defendants, he would deliver his verdict "sooner rather than later".

He reserved his decision until 10am on July 8.

The trial of Roger Moses, Donald Young and Mervyn Doolan started on March 21.

They pleaded not guilty to allegations that they made untrue statements in Nathans' registered prospectus and investment statement of December 13, 2006, as well as in a signed extension certificate on March 30, 2007.

A fourth director, John Hotchin, younger brother of Hanover Finance's Mark Hotchin, pleaded guilty to similar charges in February.

Hotchin avoided a jail term, in part for agreeing to testify against his former colleagues. He was sentenced to 11 months' home detention, ordered to do 200 hours of community service and to pay the receivers $200,000.

The court was told this payment could bankrupt him.

This week the Crown and the defence summed up their arguments.

Yesterday Young's lawyer, David Jones, QC, said his client had "good, solid business experience and common sense" and he believed that the offer documents were accurate when he signed them.

Jones said this was based on the "reasonable grounds" that Young wasable to rely on the information presentedto him by experts such as lawyers and auditors.

Lawyers for Moses and Doolan submitted similar defences during the week.

Doolan's lawyer, Nathan Gedye, cited a ruling last year that acquitted the former directors of Feltex Carpets, also charged with disclosure breaches, because they were entitled to rely on expert advice sought from auditors.

Justice Heath said yesterday that he wanted to compliment the directors on their conduct during a difficult and complexcase.

Nathans was primarily set up as a subsidiary and funding vehicle for its parent company VTL - a vending machine business with operations in New Zealand, Australia, the United States and Europe.

When Nathans was placed into receivership in 2007, owing over 7000 investors $174 million, it indicated the end for VTL.

The Crown said this case demonstrated the risks associated with related party lending from a subsidiary to its parent and its parent's interests.

The Crown added that VTL's business was failing and it used public funds via Nathans, which resulted in Nathans not being able to pay its debenture holders.