AUCKLAND, New Zealand -- Mervyn Doolan, one of the former Nathans Finance directors behind the collapse of vending technology company VTL, concluded his defense in the High Court in Auckland late last week.
In the criminal trial, now in its twelfth week, Doolan and fellow ex-Nathans Finance directors Roger Moses and Donald Young, face six charges each under New Zealand's Securities Act. The charges relate to distributing prospectuses and investment advertisements that contained misleading statements about the financial wellbeing of Nathans, the financing subsidiary of VTL. Nathans' collapse in 2007 left some 7,000 investors owed $174 million
A fourth director, John Hotchin, pleaded guilty and is serving an 11-month sentence of home detention. He was also required to repay $200,000 to Nathans' receivers and to cooperate with the prosecution in its case against his three former co-directors.
Doolan stated to the court in his closing argument that he relied on Nathans' other directors, management, auditors and lawyers for much of his knowledge about the business.
Doolan's lawyer, Nathan Gedye, argued that any alleged untrue statements made in the prospectuses were "immaterial", and that Doolan's belief that the statements were true was based on "reasonable grounds."
Gedye also said his client's belief in the statements was based on advice from and reports written by VTL's chief financial officer and several accountants. The attorney argued that it was beyond Doolan's duty to know or fact-check all of the complex rules regarding preparation of financial statements.
Gedye also stated that Doolan ceased to be an executive director beginning January 2007.
Roger Moses's closing address is currently being heard by the court.