Five Star investors angry
Five Star Finance investors are angry that Serious Fraud Office charges against group founder Neill Williams were dropped as a trade-off for pleading guilty to two charges.
Thursday, August 22nd 2013, 12:00AM
by Susan Edmunds
Williams, founder and architect of the Five Star Group was in court this morning for sentencing on two SFO charges, to which he pleaded guilty in June. He is already serving a prison sentence over separate FMA charges. An investor who did not want to be named said that Williams and the other directors had not been made accountable for related-party loans, which resulted in $8 million missing from Five Star Consumer Finance and $43 million from Five Star Finance. The SFO had told them it could not prosecute on those loans because of the lack of a trust deed. He said investors in Five Star Finance had received no money back at all, while investors in Five Star Consumer Finance had received about 25c in the dollar. Many of the investors gave money to Five Star because the directors were family or friends, he said. “Some of the large investors became shareholders in Five Star Finance and their trust in the professional standing of the directors was absolute. Such was their trust in the directors, that at Annual General Meetings of Five Star Finance, they always agreed to the agenda item that there be no auditor appointed. They were told the loans were for retail goods and that Five Star was the preferred supplier to the NZ Retailers Association. They were never told of commercial related party loans, several involving property development, and also a restaurant chain. Some were often wined and dined as part of a social group, and now feel badly betrayed by people they thought were very close friends.”
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