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BusinessDesk: Doug Graham lost pension savings in Lombard failure, 'deeply saddened' by others’ losses

Posted in Property
Doug Graham

Former Cabinet Minister Doug Graham told the High Court he lost his own retirement savings when Lombard Finance & Investments failed and his best efforts weren’t enough to safeguard the funds of other investors.

Graham, who was chairman of the property financier, reinvested NZ$12,000 of NZ$17,000 of matured debentures in October 2007 and also held a small stake in then NZX-listed Lombard Group.

Graham, chief executive Michael Reeves, and directors Bill Jeffries and Lawrence Bryant last month pleaded not guilty to five counts relating to claims they made untrue statements in a 2007 prospectus, investment statement and advertising material.

In Graham’s statement today he said the investment had been “my retirement fund.”

“I am deeply saddened to have been involved in a company which failed and lost investor capital,” he told the court, reading from a prepared statement. “I accept that some investors invested in Lombard because they trusted me to look after their saving. I did my best but it was not enough.”

Lombard went into receivership on April 10, 2008, owing approximately NZ$127 million to some 4,400 investors, and it is unlikely that secured debenture holders will receive more than 24% of their investment back. Unsecured creditors are likely to receive nothing.

In his statement, Graham defended the level of disclosure in the prospectus documents and painted a picture of his personal efforts, as chairman, to double check figures through the whole period leading up to the failure. Lombard had proposed a moratorium on payments though this was rejected in favour of receivership by the trustee.

Jeffries, a former Labour Cabinet minister, sat in on the hearing and in the public seats, former ministers Wyatt Creech and Max Bradford were briefly in attendance.

Graham said he “found it difficult to understand” the allegations which led to the indictment against him. He disputed that the offer documents omitted that five loans were impaired, saying they were not impaired using a normal accounting or layman’s understanding of the term. He said at the time he believed the trustee’s decision to appoint receivers “would ensure the losses would be greater than they needed to be” though such a view was difficult to prove either way now.

Graham said he has fretted about whether he could have become more personally involved in monitoring the loan book “but quickly concluded that, as I had no expertise in property development, my input would have been more a hindrance than a help.”

“I do not known what else I could have done,” he said. Lombard Finance “was swept away with some 40 other finance companies as the GFC (global financial crisis) struck with full force in 2008 and plunged the world into a maelstrom from which it has yet to escape.”

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Is that all He had

Is that all He had invested....just $12000.....go figure!

In Graham’s statement

In Graham’s statement today he said the investment had been “my retirement fund.”

There was I thinking Graham would have been entitled to gold plated parliamentary superannuation payments from his time as an MP and cabinet minister. Anyone know how much that should have been worth?

my heart bleeds for Doug,

my heart bleeds for Doug, what did he take out in Directors Fees, fat expense account payments and interest payments?

Love it how they all profess ignorance

hmm, lost 12 of

hmm, lost 12 of 17K

So when I look at the Annual report for 2008 and see that D Graham received a combined $92,000 in fees from Lombard group and Lombard Finance and Investement for the year ended 31 March 2008, I am supposed to feel better......


 "He (DG) disputed that the

 "He (DG) disputed that the offer documents omitted that five loans were impaired, saying they were not impaired using a normal accounting or layman’s understanding of the term."

So these loans, against property that weren't selling, where the mortgagee couldn't make the interest payment or return the capital by other means or by borrowing from another source Doug Graham didn't consider "impaired"? They were just resting?

What complete and utter bullshit. I've seen the so called prospectus offer document, delivered a couple of months prior to the whole ponzi scheme collapsing, Doug Graham splashed across it, not a mention that there was any issue with any of the loans. And just to compound the problem, dividends were paid to the inner circle on the basis, not only that the capital was sound but that the (by now massive) interest bill would be met in full by the totally insolvent mortgagee.  

@ Kiwidave I suppose we have

@ Kiwidave

I suppose we have to assume DG was one of a previous generation of  politicians not blessed with the quality of  transparency so apparent today - according to their righteous supporters. Yeah Right ! 

Yeah right, Doug. Hahaha.

Yeah right, Doug. Hahaha. Insulting to NZer's intelligence! Shame on you. Sadly for this country though, you are not alone in BS to plead a case (refer Bridgecorp trial). The directors were ignorant of the financial state of their coy. Yeah right!!!

Has Lombard Finance had

Has Lombard Finance had another X minister of the crown as a director? I seem to remember Hugh Templeton's name being associated with a problem relating to an earlier improper Lombard prospectus. Some time about 2005.

If you read the story you'll

If you read the story you'll see Bill Jeffries crop up.

I know DG and have respect

I know DG and have respect for him.  He should have just said "I was out of my depth - I don't believe I acted wrecklessly - sorry for the pain".  Easy, done, move on.

A good lesson to those contemplating taking chairmanships etc.

“but quickly concluded

“but quickly concluded that, as I had no expertise in property development, my input would have been more a hindrance than a help.”

So what was he doing as a director...what expertise did he think he brought???


what expertise did he think

what expertise did he think he brought???


Good hair and a spurious air of trustworthyness and authority.

I worked with DG for a time

I worked with DG for a time while he was in the govt and he was one of the most conceited, useless and arrogant people I ever met. He seemed to think he was royalty. But then not too surprising considering Bolger and Shipley were at least as bad.

Hey much longer

Hey much longer are you going to leave what is a totally misleading headline stuck up like a big fat lie......this sod did not lose his retirement money....that is plainly obvious...he dropped some coins out a hole in a pocket cos he had both hands on his big fat wad of cash stuffed up his jumper.

How is $17K a retirement

How is $17K a retirement fund?  Was that a typo or something?

This is a sad news for Former

This is a sad news for Former Cabinet Minister Doug Graham.Im also saddened about this.There was a time when wage earners in the U.S. could put their profits into a retirement fortune. By depositing earnings into a financial institution CD, it was feasible to live off of the interest. But with the cost living increasing faster than interest rates, that is no longer feasible. However, many other possibilities exist for a wage-earner to make that nest egg grow even in this plagued economic climate. But remember, investments always carry problems. Seeking reputable expert advice is always recommended before making any investment outlay. Make sure you know your budget before investing so you don’t need cash advances for help.

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