Former directors of collapsed firm Lombard Finance have denied at a Court of Appeal hearing that they made false statements about the company's finances.
Former justice ministers Sir Douglas Graham and Bill Jeffries and co-accused Lawrence Bryant and Michael Reeves are appealing against the convictions on four charges of making false statements before the company's collapse.
Lombard Finance failed in 2008 owing investors more than $127 million.
The lawyer for the former directors, Jim Farmer QC, argued in court on Monday that statements in the prospectus of Lombard Finance were based on their confidence in information received from their loan managers.
He said the information provided on the company's liquidity risk was adequate and did not include anything misleading.
Mr Farmer argued that the company's depletion of cash was because it was being used to repay investors and said the omission of detail in Lombard Finance's prospectus was due in part to a belief that investors should not be overwhelmed with information.
He told the court that loan projections were being updated month by month - but that they were a moveable feast.
The Crown says the sentences were inadequate and is asking the Court of Appeal to increase the penalties.
Jeffries and Reeves were sentenced to 400 hours' community work, while Graham and Bryant were sentenced to 300 hours' community work and ordered to pay $100,000 reparation.