EUFA - Lombard Finance & Investments (in receivership)
Wednesday 14 April 2010, 9:07AM
By Exposing Unacceptable Financial Activities
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In April 2008 the Prime Minister was made aware of alleged misrepresentations made by Lombard at investor meetings. It has taken 2 years since then for proceedings to occur. Slow justice is no justice.
Reported yesterday, Sir Douglas Graham stated he
“must record my dismay that it has taken 2-1/2 years to make the allegations and very disappointed the commission has never raised with me any concerns it had over the prospectus prior to filing proceedings”
In September 2008 Sir Douglas Graham wrote to EUFA members to refute allegations of mal practice and extravagance stating;
“ I very much regret that investors in Lombard Finance & Investments Ltd, of whom I am one, stand to lose some of their capital……… The risks taken in investing in Lombard were clearly set out in the company’s Prospectus and Investment Statement. The letter of July 2007 to which you refer correctly set out the facts as they were at that time. Unfortunately the business environment, much of which was beyond the control of the company, deteriorated much faster and to a much greater degree than was expected. Despite the best endeavors of the Board and management, it became clear in April 2008 that borrowers were increasingly unable to repay loans on due date which in turn meant the company would not be able to repay investors on maturity. …………………The fact that some 30 other finance companies have also defaulted would indicate the extremely difficult trading environment and perhaps explains why I have only received three letters from Lombard’s thousands of investors.
To the EUFA members, Sir Douglas also refuted allegations he deceived anybody and defended the Company CEO in an email
“the CEO’s salary package [which he elected include an expensive car] was in fact in total quite modest”
Sir Douglas has also stated publicly that he was “totally comfortable” with his role in Lombard’s governance.
At that juncture, Eufa asked Sir Douglas to uphold his legal duty as a director governed by the companies Act.
Eufa Coordinator Suzanne Edmonds said from Tauranga today;
“These proceedings raise the issue of high profile celebrity status personnel being used to bolster a company’s image. It was natural for the pubic to expect ex Ministers of the crown to be involved with reliable companies”.
Sir Douglas Graham intends to defend the proceedings.