By Gareth Vaughan & BusinessDesk
Former Bridgecorp managing director Rod Petricevic has been jailed for 6 ½ years, in the longest jail term yet handed down to a finance company boss, for his role in misleading investors and knowingly making false statements in offer documents.
At the High Court in Auckland today, Judge Geoffrey Venning said he didn’t believe Petricevic showed true remorse for his actions in the collapse of the finance company, which failed in 2007 with about 14,500 investors owed NZ$459 million, the New Zealand Herald reported.
Earlier this month Petricevic was found guilty on all 18 counts of breaching the Securities Act, Crimes Act and Companies Act in a case brought by the Financial Markets Authority (FMA), and was held in custody. The Crimes Act charges carried a maximum sentence of 10 years imprisonment.
Crown prosecutor Brian Dickey asked for a starting point of eight years, while Petricevic’s counsel, Charles Cato, said six years was adequate.
In a brief statement FMA chief executive Sean Hughes said: “FMA welcomes this outcome and respects the Court’s decision. It’s notable that the sentence is at the higher end of the scale and reflects the Court’s view of Mr Petricevic’s conduct.”
The only other finance company boss to get a comparable jail sentence - so far- following the dozens of company collapses since 2006, is ex-National Finance 2000 director Trevor Allan Ludlow. Ludlow was sentenced to six years after being convicted of theft and false accounting. Ludlow has also since been banned indefinitely - in the first such move - from setting up, operating or working in the consumer finance industry.
Petricevic and Bridgecorp finance director Rob Roest also face separate charges from the Serious Fraud Office (SFO) 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.
Bridgecorp was tipped into receivership by trustee Covenant Trustee Company on July 2, 2007. Since then the receiver PwC has returned investors just 3.5 cents in the dollar, with the first repayment coming four years after Bridgecorp's collapse. All up, PwC estimates investors' will get back no more than 10 cents in the dollar.
Roest, who was convicted on all counts brought in the FMA trial along with Petricevic, will be sentenced on May 18 with Peter Steigrad, a non-executive director. Steigrad received bail and was convicted on six of 10 counts relating under the Securities Act.
On April 17, Bridgecorp director Gary Urwin, who pleaded guilty to 10 breaches of the Securities Act, was sentenced to two years in jail and has indicated he will appeal the sentence.
Former chairman Bruce Davidson, who also pleaded guilty, was sentenced last year to home detention, community service and paid NZ$500,000 in reparations.
(Update adds further detail including on SFO case and comparison with Ludlow's sentence, plus the FMA comment).