Petricevic ‘relied on Roest’s signed analysis’
FORMER Bridgecorp managing director Rod Petricevic relied on a line-by-line due-diligence analysis signed by his fellow director and defendant Rob Roest before approving the company’s public prospectus, the High Court at Auckland has heard.
Closing Petricevic’s defence case yesterday, lawyer Charles Cato tried to discredit his client’s former colleague after Roest’s earlier evidence that he had kept Petricevic ‘‘in the loop’’ about the company’s missed payments to investors.
Petricevic has denied all knowledge of missed maturity payments to Bridgecorp’s debenture investors until after the company entered receivership in July 2007, despite Roest’s evidence to the contrary. Bridgecorp’s receivership left 14,500 investors $490 mil- lion out of pocket. They are expected to recover less than 10 cents in the dollar.
The company’s former directors, Petricevic, Roest and Peter Steigrad, are facing 10 Securities Act charges relating to allegedly making untrue statements in prospectus documents.
Cato said Petricevic was entitled to rely on a due diligence report compiled to give directors confidence in the prospectus, as well as on his fellow directors, who were all more financially literate than him, and on the company’s auditors.
The due-diligence report resulted in prospectus disclosures around the suspension of Bridgecorp’s business in Australia and the danger a political coup in Fiji might have for its Momi Bay investment, Cato said.
The Crown has alleged Petricevic also had a hand in lying to investors about why payments to them were late or missing.
Petricevic has maintained he was not ‘‘hands on’’ with the details of the business, as Roest was, and earlier testified that he ‘‘was not down in the bowels of the company checking thousands of investors were being paid’’.
‘‘There’s a lot being made by the prosecution that Mr Petricevic was the ‘top man’, and in a way he was, but there’s a difference between [being managing director] and being hands on.
‘‘If he was so hands on why was he left out of so many emails?’’
Cato said the ‘‘army’’ of Crown investigators would have searched ‘‘high and low’’ for emails addressed to Petricevic containing information about missed investment payments, but none had been presented.
Roest had clearly received emails from management informing him of missed payments, but chose to keep the information from Petricevic and had ‘‘a disposition’’ to do so, Cato said.
Roest was an experienced financial adviser, had responsibility for the company’s finances, and was formerly company secretary before he was made a director, and therefore would have known the details of Bridgecorp’s obligations to its trustee better than anyone, Cato said.
Cato said he also believed three key witnesses presented evidence at the trial— some relating to who was present at a meeting at which it was decided to lie to investors— which had never been spoken of beforehand including in prerecorded briefs of evidence.
He said the Crown had not addressed such inconsistencies in witness statements but instead hoped the weight of their testimony would sway the judge.
Closing statements in Roest’s defence are due to be heard on Monday.
The Bridgecorp group’s former chairman, commercial lawyer Bruce Davidson, and another former director, Gary Urwin, have admitted the charges. Davidson agreed to pay $500,000 in reparations and was sentenced to nine months home detention.