“.. Bridgecorp staff were instructed to lie to investors who called the company asking why they hadn’t received their regular interest repayments, Auckland District Court was told yesterday.
Bridgecorp collapsed into receivership on July 2, 2007, owing 14,500 investors about $459 million. Investors are expected to recover no more than 10 cents in the dollar.
Prosecutor Brian Dickey told the court that at one point before it failed ..
.. Bridgecorp had a bank balance of just $16,000.
One staff member said in an internal email four months before it collapsed that maybe investors could be told: ..
..”We have no money, can’t pay our bills, are holding back payments, (and are) lying to investors”.
Faced with a cashflow and liquidity crisis, which it had failed to disclose to the market ..
.. the company was repaying only the noisiest and most persistent investors in the months leading up to receivership.
Unbeknown to most, Bridgecorp had been defaulting on investor repayments since February that year.
Between February and June 2007, there were 44 separate defaults involving nearly $21m, prosecutor Brian Dickey told the court.
“It appears that staff were directed to lie to investors who contacted the company asking why they had not received their full payments on the relevant due date.
The late or non-payments were attributed to computer errors, bank errors or accounting department errors.”
go to source/story>>Bridgecorp staff ‘were told to lie’ | Stuff.co.nz
