Trial of Five Star four set to start today

Photo / Greg Bowker

Former Five Star Finance directors are due to appear in the Auckland District Court today facing more than 100 Serious Fraud Office charges.

The directors, Nicholas Kirk, Marcus MacDonald, Anthony Bowden and Neill Williams, will appear for the first time on charges that concern related party lending that occurred between 2003 and 2007.

The SFO alleges they acted dishonestly and breached obligations under the trust deed. The directors have not yet entered a plea.

The directors were also on the boards of related companies Five Star Consumer Finance and Five Star Debenture Nominees, which collapsed in 2007. More than $90 million of investors' money is estimated to have been lost.

The Companies Office has also laid criminal charges against all four of Five Star's directors under the Securities Act and Financial Reporting Act.

The charges relate to allegedly false and misleading information in investment statements and the company's 2006 registered prospectus.

The Companies Office case is set down for trial on October 26 and is expected to last up to a month.

The directors have pleaded not guilty to the Companies Office charges.

The four were banned by the Registrar of Companies from holding board or management positions in New Zealand companies in April last year. Directors with a track record of commercial failure are not permitted to hold directorships for five years.

When the largest company in the group, Five Star Consumer Finance, collapsed in August 2007, it owed $63 million, of which $54.43 million was owed to debenture holders.