The Serious Fraud Office (SFO) has brought 92 criminal charges against three directors of the failed Gisborne finance company Rockforte Finance Limited (Rockforte).
Nigel Brent O’Leary and Colin Mark Simpson each face 34 charges and John Patrick Gardner faces 24 charges under the Crimes Act.
The alleged offences include theft by a person in a special relationship, false accounting, obtaining by deception and false statements by a promoter.
The charges carry maximum sentences ranging from seven to ten years imprisonment.
Established in 2003 as a provider of consumer and commercial financial services, Rockforte Finance had a majority of its investors from the Poverty Bay region.
The company operated under a trust deed that prohibited it from using investors’ funds to make loans to related parties in excess of 2% of its total tangible assets without the consent of the trustees.
The SFO alleged that the directors allowed a significant portion of investors’ money to be used as a source of funding for their personal business interests in two companies, namely, Gisborne Haulage and Michael Ward 1969 Ltd, which operated the ‘Jean Jones’ label throughout New Zealand.
High public interest
The MED’s National Enforcement Unit and Financial Markets Authority provided support and assistance to the SFO on this case.
SFO Chief Executive Adam Feeley said that the allegations underpinning the charges were similar to many of its finance company investigations.
“Rockforte Finance is yet another finance company where people have endeavoured to make prudent investments in a company they believed made arms-length commercial loans and operated under the watchful eye of an independent trustee.
“But the reality has been something very different,” he said.
He said that while the investors’ losses, at $3.86 million, were small compared to other finance companies and the Crown Retail Deposit Guarantee Scheme ultimately covered a majority, there was still significant public interest in the prosecution.
“The failure of Rockforte Finance and the consequential failure of several other businesses had a significant impact on the Gisborne community. It is important for investor and business confidence that the persons responsible for that failure are held to account,” he said.
Emerging clarity
Mr Feeley said the case was the penultimate finance company investigation to be concluded by his Office, with only Hanover Finance still under investigation.
“We are pleased that there is now some clarity around this and most other finance company failures. We will be putting all necessary resources into managing our eight current finance company prosecutions through to an appropriate conclusion this year,” he said.
Mr Feeley said that while the investigations into finance companies were nearing conclusion, the SFO was still dealing with a significant number of new cases, including 21 new investigations in the first half of the financial year and a further 31 cases under prosecution.
Editor’s Note: The above report was based on a media release by the Serious Fraud Office.
