Owen Francis Tallentire, the ex-CEO of failed property financier Capital + Merchant already serving a five year jail sentence stemming from a Serious Fraud Office prosecution, faces up to another five years in jail after pleading guilty to charges brought by the Financial Markets Authority.
The FMA says Tallentire has pleaded guilty to three charges under the Securities Act. He pleaded guilty to two charges of making an untrue statement in a registered prospectus and one charge of distributing advertisements which included an untrue statement.
The charges he has pleaded guilty to carry a maximum penalty of five years imprisonment or fines of up to NZ$300,000. The FMA and Tallentire will make sentencing submissions ahead of his March 15 sentencing.
Under the Securities Act, Tallentire’s conviction means he is automatically banned from managing companies for five years, FMA head of enforcement, Belinda Moffat said.
Capital + Merchant Finance owed NZ$167.1 million to about 7,500 investors when it was tipped into in receivership in November 2007. Investors have got nothing back. Then SFO boss Adam Feeley last year described Capital + Merchant's failure as being "as bad as anything which occurred in the (finance company) industry."
Tallentire is currently serving a five year prison sentence after he was found guilty on two charges of theft by a person in a special relationship in the prosecution taken by the SFO. Former Capital + Merchant directors Neal Medhurst Nicholls and Wayne Leslie Douglas were sentenced to seven and a half years prison following the SFO case.
Moffat welcomed the guilty plea.
"This case is a further illustration of the importance of holding to account those who are responsible for untrue statements made to investors in offer documents, particularly in cases such as this where the conduct is particularly serious and the market impact is great," Moffat said.
"The prosecution involving similar charges against other directors of Capital + Merchant Finance will begin on February 11."
Capital + Merchant's trustee was Perpetual Trust and its auditor was BDO Spicers.
(Update adds further detail).