The charges against: Five Star Consumer Finance and Five Star Finance

Defendants

Marcus Macdonald, Nicholas Kirk, Anthony Bowden, Neil Williams

Charges

It is alleged that the Defendants:

- Five Star Consumer Finance Limited (FSCF) charges: made untrue statements in the investment statements and registered prospectuses of that company dated 20 September 2006. These statements concerned the type of lending being engaged in by FSCF, the standards applied by FSCF in its lending practice, and related party loans made by FSCF.

It is also alleges that the directors made further untrue statements when they signed prospectus extension certificates 21 December 2006.  These stated that FSCF's financial position had not materially and adversely changed since 31 March 2006, and that the 20 September 2006 prospectus was not false or misleading.

- Five Star Finance and Five Star Debenture Nominee (FSF and FSDN) charges: offered securities in contravention of the Securities Act in that they did so without having registered a prospectus or provided investors with an investment statement.  Further, that they offered investments in FSF and FSDN in advertisements that were not authorised advertisements for purposes of the Securities Act.

The SFO also laid charges against all four directors of FSCF.

Penalties

The FSCF charges were laid indictably under section 58 of the Securities Act and carry a maximum penalty of five years imprisonment or fines of up to $300,000. 

The FSF and FSDN charges were laid summarily under section 59 of the Securities Act and carry a maximum penalty of a fine not exceeding $300,000.

Date filed

4 August 2008 in the District Court at Auckland (FSF and FSDN).

30 November 2009 in the District Court at Auckland (FSCF).

Current status

All defendants have pleaded ‘guilty'.  Due for sentencing on 22 December.

Marcus Macdonald and Nicholas Kirk have each pleaded guilty to the SFO charges and will be sentenced on 21 December 2010.