Bridgecorp directors to deny all charges

The three remaining Bridgecorp directors on trial for allegedly misleading investors will admit none of the crown’s allegations against them.

The trial of Rod Petricevic, Rob Roest and Peter Steigrad began in earnest in the Auckland High Court this morning with vigorous defence denials of all allegations.

The Financial Markets Authority brought the case alleging the directors breached the Securities Act by making untrue statements in investment documents and registered prospectuses in December 2006. Bridgecorp collapsed a year later, owing 14,500 investors $459 million (about $31,655 each). Receivers have estimated debenture holders could see a return of less than 10 cents in the dollar.

Mr Petricevic’s lawyer, Charles Cato, said it was over to the Crown to prove every aspect of the allegations. He said Mr Petricevic at all times honestly believed that all statements in Bridgecorp prospectuses and investment statements were accurate and not misleading.

Mr Cato said that Mr Petricevic relied on the knowledge and considerable experience of the board of directors and particularly that of board chairman Bruce Davidson. The former Auckland District Law Society president and NZ Law Society vice president pleaded guilty last month and was sentenced to nine months' home detention.

“Mr Petricevic relied at all times on normal corporate due diligence procedures, and relied on senior legal advice and advice from other professionals,” Mr Cato told Justice Geoff Venning, who is hearing the trial alone.

“Mr Petricevic had relied on the qualifications and judgement of Mr Davidson which he has trusted for many years,” Mr Cato said.

Mr Cato said that Mr Petricevic had had discussions not only with internal lawyers but external lawyers, officers of the Companies Office and other financial professionals before he signed the contentious financial documents and he believed they were in order at all times.

He said Mr Petricevic did not receive any advice from any source that any further disclosures were required and that all risks were disclosed and informed to the market.

“It’s a great regret to him that Bridgecorp investors suffered loss,” Mr Cato said.

Mr Cato said that Mr Petricevic believed everything was in order and had belief and comfort from the fact Mr Davidson had signed off on the prospectus and financial statements.

“This was not a once over lightly exercise,” Mr Cato said.

The thrust of Mr Petricevic’s defence was echoed by lawyers for Mr Roest and Mr Steigrad.

A separate trial to hear a Serious Fraud Office case against Mr Petricevic and Mr Roest has been delayed until the FMA prosecution is concluded. 

The case is proceeding.