Former Bridgecorp managing director Rod Petricevic and ex-chief financial officer Rob Roest have been found guilty on all 18 charges brought against them by the Financial Markets Authority (FMA) with fellow director Peter Steigard found guilty on six of the ten charges he faced.
Both Petricevic and Roest have been remanded in custody, with Justice Geoffrey Venning reportedly saying a prison sentence was "inevitable" for Petricevic. Petricevic is to be sentenced on April 26 and Roest on May 18. Steigard has been remanded on bail until sentencing on May 18.
The FMA alleged the men made untrue statements in the investment statements and registered prospectuses of Bridgecorp and Bridgecorp Investments Ltd (BIL) dated December 21, 2006, and that they made further untrue statements when they signed prospectus extension certificates for Bridgecorp and BIL on March 30, 2007. Bridgecorp collapsed in July 2007. All three denied the charges.
Former Bridgecorp chairman Bruce Davidson was sentenced to nine months' home detention last October after changing his plea to guilty, and was ordered to pay NZ$500,000 in reparations and do 200 hours of community work. Gary Urwin, another former director, entered a guilty plea last November and will be sentenced on April 17.
In a brief statement the FMA said it welcomed the High Court’s verdicts, noting Justice Venning found Petricevic, Roest and Steigrad guilty on charges of breaching the Crimes Act 1961, the Companies Act 1993, and the Securities Act 1978. The FMA says charges under section 58 of the Securities Act carry a maximum penalty of five years imprisonment and fines of up to NZ$300,000. Charges under section 242 of the Crimes Act carry a maximum penalty of 10 years imprisonment, and charges under section 377 of the Companies Act carry a maximum penalty of five years imprisonment or fines of up to NZ$200,000.
The FMA separately filed civil proceedings, which were stayed pending the outcome of this criminal case.
Bridgecorp was tipped into receivership by trustee Covenant Trustee Company on July 2, 2007 with more than 14,000 secured debenture holders owed NZ$459 million. Thus far receiver PwC has returned them just 3.5 cents in the dollar and estimates investors' will get back no more than 10 cents in the dollar in total.
Petricevic and Roest also face separate charges from the Serious Fraud Office including the allegedly fraudulent acquisition of a luxury boat, the Medici, bought using Bridgecorp funds totaling NZ$1.8 million. The SFO alleges NZ$1.2 million of "dishonest payments" of Bridgecorp funds authorised by Petricevic to a business called ABb operated by Janita Wright, a personal acquaintance of Petricevic. These charges carry a maximum potential jail term of seven years and are scheduled to be heard in September.
(Updated with further detail, background and verdicts).