Five directors cleared of charges over collapsed company Feltex Carpets Ltd say they will now seek some form of redress.
The company went into liquidation in 2006, leaving 8000 shareholders who had invested more than $250 million in its public float holding worthless shares.
John Feeney, John Hagen, Peter Hunter, Timothy Saunders and Peter Thomas were accused of failing to disclose in the company's 2005 half-yearly financial statements that Feltex was in breach of its $120 million loan with ANZ Bank.
Each of the men faced two charges under the Financial Reporting Act, but on Monday were found not guilty of all charges in the Auckland District Court.
Judge Jan Doogue said there was overwhelming evidence that the directors are honest men who conducted themselves with unimpeachable integrity.
The judge said there was no evidence that they intended to mislead authorities, the market or shareholders.
During a lengthy trial, the Crown argued that the company directors all fell short of their legal obligations to publicly disclose the real financial state of Feltex to investors.
However, the directors' lawyers argued that the company's accounting firm, Ernst and Young, which was paid to review financial statements, is responsible for the inaccuracies.
The directors say the not guilty verdicts confirm that they were acting honestly and with integrity.
Former Feltex chief executive Peter Thomas told Checkpoint on Monday that the prosecution was ill-founded from day one, and the the Companies Office's powers to prosecute should be reviewed.
Mr Thomas said the verdicts are not the end of the matter and, though he would not confirm whether compensation is being sought, every avenue available to the directors would be reviewed carefully.
John Hagen said he is angry that a case was ever brought against himself and the other directors as there were no grounds for one, and their reputations have been damaged as a result.
'Difficult situation' for directors
A specialist in company and securities law says he has sympathy for the position the Feltex directors were put in.
Roger Wallis, a partner at law firm Chapman Tripp, told Checkpoint on Monday that the men were in a difficult situation.
Mr Wallis said while the law places a responsibility for the accounts on directors, it does recognise that reliance is also put on an accounting firm, which is what the judge found in the Feltex case.
