Five Star Finance Directors banned

Press Release

Five Star Finance Directors banned

8 April 2009

The Deputy Registrar of Companies Peter Barker has announced that the directors of the Five Star group of companies are prohibited from directing or managing companies in New Zealand.

Marcus Arthur MacDonald, Nicholas George Kirk and Anthony Walpole Bowden were the directors of Five Star Finance Limited, Five Star Consumer Finance Limited and Five Star Debenture Nominee Limited. Under section 385 of the Companies Act, where a person has been a director of more than one failed company within 5 years, that person must satisfy the Registrar that their management of the companies’ affairs that was not, at least partly, responsible for the companies’ demise.

Mr MacDonald, Mr Kirk and Mr Bowden were unable to satisfy Mr Barker that the way in which they managed the affairs of the Five Star group of companies did not lead to the failure of those companies.

Mr Barker found the directors’ failings to be “serious and fundamental” when he considered whether “the directors fully understand their duties and responsibilities”.

The report to the Registrar of Companies by the Ministry of Economic Development’s National Enforcement Unit alleged mismanagement including: reckless trading; breaches of each of the director’s duties under the Companies Act 1993; and the failure to maintain adequate books and records.

The directors requested that the decision on this matter should be delayed until they had faced additional pending charges. They believed the result of this decision could prejudice the following criminal proceedings. However, Mr Barker advised “there is no reason to delay this decision” as any other legal proceedings are “separate and distinct from these matters”.

The prohibition notices were issued on 23 March 2009. Mr MacDonald, Mr Kirk and Mr Bowden are all prohibited for five years from this date.

Background:

Five Star Consumer advised that its principal business consisted of providing financing for consumer durables to the retail consumer market – for example loans financing the purchase of household items such as furniture and whiteware. It was put into receivership on 23 August 2007. Shortly after, various related companies including Five Star Finance Limited and Five Star Debenture Nominee Limited, were put into receivership and/or liquidation. These companies provided financing to various non-consumer industries.

Prohibition

The maximum term of prohibition under Section 385(3) of the Companies Act 1993 is five years. The prohibition prevents those concerned from acting as directors or promoters of a company, or being concerned in, or taking part, whether directly or indirectly, in the management of a company.

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