20 Oct 2011

Lombard director 'never considered' warning investors

7:50 pm on 20 October 2011

A director of the failed Lombard Finance has told a court he never considered telling investors about the company's dwindling cash reserves.

Lombard Finance collapsed in April 2008, owing $127 million to thousands of investors. Four directors are facing charges in the Wellington High Court.

Michael Reeves, Lawrence Bryant and former justice minsters Sir Douglas Graham and Bill Jeffries are accused of making false statements in offer documents issued in 2007 and 2008.

On Thursday, tapes were played to the court of Mr Reeves, Mr Bryant and Mr Jeffries being interviewed by Michelle Peden, the forensic accountant investigating the case for the Securities Commission.

The interviewer asked Mr Reeves why directors never told investors of Lombard Finance's deteriorating position.

Mr Reeves said he never discussed the issue with the other board members and did not recall even considering it.

He said he always believed the advice of his management team that things would improve after April 2008.

Mr Jeffries said he took his position and responsibilities very seriously and always sought independent advice.