The director of a failed finance company, which went into
receivership owing investors more than $15 million, was today
sentenced to a year's home detention.
Brian Clegg, director of failed finance company Clegg and Co
Finance Limited (In Receivership), had earlier pleaded guilty
to six charges under the Companies Act and the Securities
Act, and appeared in Auckland District Court for sentence.
Clegg was sentenced to home detention on five charges, and
convicted and discharged on one charge.
Registrar of Companies Neville Harris said after the
sentencing that a number of the charges related to false and
misleading statements made in the company's 2005 and 2006
prospectuses and to the company's trustee.
"A separate charge relates to misleading or deceiving the
Securities Commission," he said.
The National Enforcement Unit of the Companies Office began
its investigation after the matter was referred to it by the
Securities Commission.
Clegg and Co Finance Limited went into receivership on
October 4, 2007. At the time the total balance owing to
investors was more than $15 million.
Mr Harris said anticipated returns to investors were between
55 and 60 cents in the dollar.
The charges Clegg pleaded guilty to were:
* Two charges under section 58 of the Securities Act 1978 for
providing false information in the company's 2005 and 2006
prospectuses. The company advised in these prospectuses that
it had complied with the requirements of the related party
requirements set out in its Trust Deed, when it had not.
* Three charges under section 377 of the Companies Act 1993
for providing false information in relation to the extent of
related party lending in reports provided to the trustee,
Covenant Trustee Company Ltd.
* One charge under section 59A of the Securities Act 1978 for
misleading the Securities Commission about the true financial
position of the company. He was convicted and discharged on
this count.
