A likely story?

3 Comments »

• Peter says:

  20 April 2010 at 7:08 am

  Actually, after a dinner conversation with a friend who is an auditor, my sense of the ‘possibility’ of this sort of thing (accountants’ reports not quite being adequately transparent/understandable) has increased. No specific comment on the Feltex case.

• Peter says:

  2 August 2010 at 1:03 pm

  Feltex Five ‘all honest men’ says judge

  By Kelly Gregor NZ Herald UPDATED12:45 PM Monday Aug 2, 2010

  There is no evidence the Feltex’s directors misled the market, shareholders, potential investors or creditors when they approved interim financial statements that failed to disclose its debt with ANZ
  correctly or that it was in breach of its loan with the bank, a court heard today.

  Auckland District Court Judge Jan Doogue delivered her not guilty verdict at noon today, the directors, Tim Saunders, John Feeney, Peter David Hunter, John Hagen and Peter Thomas, were each charged with two breaches of the Financial Reporting Act.

  Doogue said the directors were “all honest men” who had conducted themselves with integrity. …

  The directors all concede now that those details were not disclosed in the accounts to December 31, 2005, but they claim at the time they believed the statements met all the necessary requirements under the accounting standards.

  The company paid accounting firm Ernst & Young A$113,000 to conduct a voluntary review of the interim half- year statements to December 31, 2005.

  Ernst & Young failed to pick up the mistakes.

  Doogue said the directors should have been able to rely on expert professional advice, advice that they had voluntary sought because they wanted to ensure the accounts were accurate and complied with the newly adopted International FinancialReporting Standards (IFRS).

  This was the first time Feltex had used IFRS and had taken “comprehensive steps” to ensure they were compliant.

  http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10663051

• Peter says:

  14 September 2010 at 7:53 pm

  Twists and turns,,,

  Feltex liquidator pursues case against directors

  Monday Sep 13, 2010

  The Feltex directors were found not guilty of breaching financial reporting rules. Photo / Sarah Ivey
  Feltex’s liquidator, McDonald Vague, is pushing ahead with its court case against five former directors of the failed carpet maker, spurred on by admissions made in the case the five recently won against the Registrar of Companies.

  McDonald Vague director Iain McLennan said the Registrar of Companies case, including a district court trial, had been watched closely.

  “We were happy with some of the admissions that were made,” McLennan said.

  He declined to elaborate on just which admissions had caught his eye.

  ANZ, owed A$119.5 million, ran out of patience with the company’s board and tipped Feltex into receivership on September 22, 2006 with McGrathNicol appointed receivers.

  The receivership came just 27 months after Feltex’s NZ$1.70-a-share, NZ$254 million initial public offering (IPO) in June 2004 when private equity group Credit Suisse First Boston Asian Merchant Partners sold out lock, stock and barrel. Shareholders lost everything.

  McDonald Vague was appointed liquidator in November 2006.

  It subsequently filed a High Court statement of claim seeking about NZ$41 million from the five – former chairman Tim Saunders, ex-CEO Peter Thomas, John Hagen, Peter David Hunter and John Michael Feeney.

  The liquidator’s allegations include reckless trading and negligence.

  http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=10673160