Rates round-up: March 19
Petricevic lawyer blames Roest; Hobbs estate under threat; bank regulations slowed
Monday, 19 March 2012
by Niko Kloeten
The lawyer for former Bridgecorp managing director Rod Petricevic has turned his guns on Petricevic's co-accused Robert Roest over the company's collapse.
The pair, along with fellow former Bridgecorp director Peter Steigrad, are on trial in the High Court at Auckland on Securities Act charges.
The three have been accused of misleading investors by making false statements in offer documents, while Roest and Petricevic face separate charges relating to promotional material that claimed the company had never missed a payment to investors.
In his closing submission last Friday, Petricevic's lawyer Charles Cato challenged Roest's claim he had informed Petricevic about missed payments in early 2007.
Cato said the Crown was in an awkward position relying on Roest's evidence in this instance when it had been "vitriolic" in its treatment of other parts of his defence.
He said Roest was in "serious dereliction of his duties" for failing to tell the other Bridgecorp directors or the company's trustee about the missed payments.
Justice Geoffrey Venning has indicated he will deliver a verdict on April 5.
Hobbs estate could be targeted
Rugby great Jock Hobbs' estate could get tied up in a legal battle over failed finance company Strategic Finance, which Hobbs used to direct.
The former All Black and New Zealand Rugby Union chairman died last Tuesday of leukaemia after a six-year battle.
However, the New Zealand Herald reported a "senior legal source" saying his estate could be included if the Financial Markets Authority decided to take a civil case against the company, although it would be up to the FMA to decide.
The FMA has the power to take civil action against companies on behalf on investors, but its investigation into Strategic is still going and it hasn't made a decision yet.
Hobbs was one of six directors of Strategic, which is in receivership after it was put into a moratorium in 2008 owing 13,000 investors more than $400 million.
So far debenture holders have only received 7c in the dollar ($26 million), with another small payment to be made in April according to the company's receivers.
Bank regulations put back
The Reserve Bank has slowed down its implementation of the Basel III capital adequacy rules after lobbying from the banks.
The central bank has issued a new consultation paper after banks raised concerns about the speed of the changes proposed in its earlier consultation paper in November.
It originally planned to have the rules fully in place by January 1 next year but has delayed full implementation until the start of 2015.
However, this is still well ahead of the Basel Committee's recommendation for them to be phased in by 2019.
The rules will increase the amount of capital banks must hold relative to their assets and will also introduce a "countercyclical capital buffer".
This will be used when "national authorities judge that excess private sector credit growth is leading to a build-up of system-wide risk".
Banks will be given one year's notice before this buffer takes effect.
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