16 Feb 2010

Bridgecorp risk framework was out of date, hearing told

3:20 pm on 16 February 2010

Bridgecorp's internal risk manager has told a hearing he used the internet search engine Google to update the company's risk management framework which was two years out of date.

The finance company went into receivership in July 2007 owing $459 million to 14,500 investors.

A preliminary hearing for five men linked to the company, including former executive director Rod Petricevic, began at the Auckland District Court on Monday.

Mr Petricevic, former chairperson Bruce Davidson, non-executive directors Peter Steigrad and Gary Urwin and executive director Rob Roest, face 10 charges each.

They are accused by the Securities Commission of giving untrue information in Bridgecorp's prospectuses and investment statements relating to the company's overall financial position and liquidity.

Mr Steigrad did not appear in court on Monday, but his lawyer says he has conceded there is a case against him.

On Tuesday, Bridgecorp's internal risk manager Indra Kumar told the hearing the framework had not been updated in two years when he joined the company.

Mr Kumar told the hearing he used the out-dated risk framework as a platform to update it with best practices.

He said he used the common search engine Google to obtain the best current practice.