The Shareholders Association says the verdicts in the Feltex case represent a significant drop in standards, allowing directors to pass the buck to their advisors.
Five directors from collapsed firm Feltex Carpets Ltd were cleared at the Auckland District Court on Monday of charges under the Financial Reporting Act.
They had been accused of failing to disclose in the company's 2005 half-yearly financial statements that Feltex was in breach of its $120 million loan with ANZ Bank.
The company went into liquidation in 2006, leaving 8000 shareholders who had invested more than $250 million in its public float holding worthless shares.
During the trial, the directors' lawyers argued that the company's accounting firm, Ernst and Young, which was paid to review financial statements, was responsible for the inaccuracies.
Shareholders Association chairman John Hawkins says the court's decision is cold comfort to investors who never received correct information.
He says its frustrating that when things go wrong, directors say the advice they got was wrong, so it's not their fault.
Delivering her verdict on Monday, Judge Jan Doogue said there was no evidence the directors intended to mislead authorities, the market or shareholders, and said that they were honest and had acted with integrity.
One of the directors, Peter Thomas, says other company directors can take some comfort from the judgement that the courts understand their duties. However, he says, he has no confidence that the regulator understood the law or directors requirements.