18 Sep 2012

Home detention for National Finance director

6:07 pm on 18 September 2012

A director of a failed finance company has been sentenced to 10 months' home detention and 300 hours' community work for making untrue statements in a prospectus.

Carol Braithwaite underestimated the risk and bad debt of National Finance and failed to disclose she was married to fellow director Trevor Ludlow, from whom she took interest-free loans to buy luxury apartments in Fiji, the Auckland High Court was told on Tuesday.

More than 2000 people lost $18 million when National Finance collapsed in 2006.

Ms Braithwaite's lawyer, Arlan Arman, says it was a crime of ignorance and an error of judgement.

However, the prosecution said abdicating her responsibilities to other directors amounted to gross negligence.

The mother-of-five pleaded not guilty to the charge but was convicted by a jury in July this year.

The judge said prudent investors - many of whom were retirees - would have been unlikely to invest if they had been properly informed of the risks and bad debt of National Finance.

Ludlow has already been sent to jail for more than six years - one of the heaviest sentences handed out to a finance company director.

Mr Arman says Braithwaite thought she might be going to prison.