14 September 2011
The Financial Markets Authority today announced that it has laid 69 criminal charges against three people associated with failed finance company Belgrave Finance Ltd (Belgrave).
FMA alleges former Belgrave directors Stephen Charles Smith and Shane Joseph Buckley, and associate Raymond Tasman Schofield, breached section 58 of the Securities Act by making untrue statements in documents offering securities to the public. FMA alleges that in substance Mr Schofield acted as a director of Belgrave.
The statements related to:
If convicted, the three men face a maximum penalty of five years' imprisonment or fines of up to $300,000 plus $10,000 for every day the offence continued.
FMA further alleges the three men breached section 377 of the Companies Act 1993 by making a false or misleading statement to the trustee appointed to safeguard the interests of investors in Belgrave secured debenture stock.
The maximum penalty for a breach of section 377 is five years' imprisonment or a $200,000 fine.
The charges follow an investigation started by FMA's precursor, the Securities Commission. Shortly after its establishment on 1 May 2011 FMA referred the investigation to the Serious Fraud Office (SFO).
The SFO has also laid charges against the three men under the Crimes Act.
Belgrave was placed into receivership in May 2008 owing approximately $22 million to around 1,000 investors.
Belgrave Finance Limited was incorporated in September 2000. The company was purchased by Stephen Smith and Shane Buckley in June 2005.
Belgrave provided loans for commercial and residential property development. Funds for lending were sourced primarily from the issue of securities to the public in the form of debenture stock and convertible capital notes.
The company was placed into liquidation in April 2010, the 20th finance company to collapse in two years.