More Bridgecorp directors charged
23rd Dec 08, 4:14pm
The Securities Commission has laid criminal charges against the chairman of Bridgecorp Bruce Davidson and non-executive directors Gary Urwin and Peter Steigrad. Criminal charges were laid by the Registrar of Companies earlier this year against the executive directors, Rodney Petricevic and Robert Roest. These new charges follow further investigations by the Commission. The Commission has also issued civil proceedings against all five directors. "All the directors are responsible for Bridgecorp's offer documents. The Commission believes that the offer documents misled investors by misrepresenting the overall financial position of those companies and the risk of investing in them," Commission Chairman Jane Diplock said. The proceedings relate to Bridgecorp Limited (Bridgecorp) and Bridgecorp Investments Limited (BIL). When Bridgecorp went into receivership in July 2007 it owed approximately $459 million of debenture stock to some 14,300 investors. The receivers estimate the likely recovery for investors to be 13-44%. BIL was placed in liquidation also in July 2007. On that date it owed approximately $29 million to investors. Almost all of the money raised by BIL was on-lent to Bridgecorp and is unlikely to be recovered. The Commission alleges the directors made untrue statements in the investment statements and registered prospectuses of Bridgecorp and BIL dated 21 December 2006. These statements concerned Bridgecorp's overall financial position, solvency, and liquidity which the Commission believes had been substantially deteriorating since 30 June 2006. BIL was affected by this because it depended on Bridgecorp to be able to repay its own investors. Other alleged untrue statements concern related party lending, lending policies and procedures, that Bridgecorp had never missed an interest or principal repayment, and that all material information had been disclosed in the prospectus. The Commission also alleges that the directors made further untrue statements when they signed prospectus extension certificates for Bridgecorp and BIL on 30 March 2007. These stated that the companies' financial position had not materially and adversely changed since the last balance date, and that the 21 December 2006 prospectuses were not false or misleading.