Focus on ACC

Investigations have exposed the key role of a bankrupt in the management of collapsed finance company Five Star.

A new report says investors placed their faith and savings in the listed company directors of the failed finance firm, while bankrupt Neill Allan Williams was exercising huge influence over its direction.

It follows an earlier report that linked Williams to $19 million in loans made to family members and friends for which no documentation could be found.

The latest revelation comes from the Ministry of Economic Development's National Enforcement Unit - a team of investigators that enforces company law and has led inquiries into the failed finance companies.

The unit has already reported on the failures of National Finance, Five Star and Bridgecorp, which have collectively lost about $620m.

Its reports have led to the deputy registrar of companies Peter Barker banning directors of those companies from running any other businesses, in some cases for five years, the maximum period allowed.

Barker had already banned Five Star's official directors, Magnus MacDonald, Nicholas Kirk and Anthony Bowden.

The latest report records evidence that staff viewed Williams, MacDonald and Kirk as the "Three Musketeers", even though Williams was a bankrupt, was not on company phone directories and did not use company email.

It has resulted in him being banned from managing a company until 2014. The ruling is unusual because he was never listed as a director of the company, operating off the books and behind the scenes.

Bankrupts are banned from being involved in management, and the finance company had given Government watchdogs assurances that he did not hold key decision-making positions.

National enforcement unit manager Shane Keohane said the case showed that even those who were not listed as directors of companies but were shown to be involved in management could be held to the same level of responsibility as a listed director.

The report describes Williams' dealings with investors Uwe Balzat and his father Boto Balzat. Uwe Balzat told investigators Williams "seemed to be the one pulling the strings at Five Star" and his father described the bankrupt as "the policeman in the background", ensuring the company was running properly.

Williams formed close links with the Balzats.

Williams, Kirk, MacDonald and Bowden face more than 140 criminal charges brought by the Companies Office.

Herald on Sunday

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