14 Jun 2011

Nathans director 'not legally to blame' for collapse

5:21 pm on 14 June 2011

A Nathans Finance director accused of providing misleading information to investors says he relied on the advice of experts and should not be held to blame for the company's collapse.

Nathans was placed into receivership in 2007, owing 7000 investors $174 million.

Directors Kenneth Moses, Donald Young and Mervyn Doolan are on trial at the Auckland High Court charged with six breaches of the Securities Act.

The Crown says the company's prospectus implied it was a sensible lender but it was actually lending very high amounts to prop up its parent company.

Bruce Davison, the lawyer for Keneth Moses, told the court on Tuesday his client thought the company could solve the problem by refinancing.

He says Mr Moses was entitled to rely on the information he had from experts when he signed off the prospectus.

However, the Crown says the directors should have sought independent advice.

The defence told the court Mr Moses made mistakes in relation to the collapse of Nathans Finance, but should not be judged by those with the benefit of hindsight.

Mr Davison says his client was worried about the debt levels and considered resigning, but decided to stay on to help navigate the company out of difficulty.

Mr Davison says the Crown's case is based on detailed analysis carried out with the benefit of time and hindsight, but Mr Moses and the other directors made the best decisions they could at the time in a competitive business world.