Former director believed prospectus, court told
The defence strategy for former National Finance director Carol Braithwaite will hinge on her belief that statements made within a registered prospectus were true, the High Court has been told.
Elements of her defence strategy were revealed in a hearing yesterday in which her lawyer successfully managed to have her trial heard before a jury instead of a judge alone. It is the first time a finance company prosecution will be heard by a jury.
Braithwaite, who yesterday denied the charge laid by the Financial Markets Authority of making untrue statements in a prospectus, has made an admission of basic facts.
In essence, Crown prosecutor John Dixon said, Braithwaite had admitted that the prospectus contained untrue statements, that she signed the prospectus and that they were delivered.
"That is the Crown case," he said. "The defence has to establish the affirmative defence – that the accused believed that the statements [in the prospectus] were true."
The trial will begin on Monday before Justice Pamela Andrews. It is set down for two weeks.
The Crown argued against a jury trial as it had believed the earliest the case could be heard was next year. Dixon also said the case was unsuited for a jury trial.
"Financial and accounting evidence will be difficult for the jury to understand," he said.
Defence lawyer Quentin Duff said Braithwaite was entitled to a jury trial as she was no longer standing trial with fellow former director Anthony Banbrook, who had opposed a trial by jury. Banbrook pleaded guilty and will be sentenced next month.
The defence case was not solely based on Braithwaite's reliance on Trevor Ludlow, her former husband and the company's founder, as to the contents of the prospectus, Duff said.
Dixon argued the law had clearly shown that directors could not simply rely on auditors or managers to tell them the prospectus contents were correct.
Ludlow was found guilty last year on charges brought by the Serious Fraud Office. He was sentenced to five years and seven months jail. He also pleaded guilty to charges brought by the Financial Markets Authority and was sentenced in January to an additional nine months in jail.
The SFO also laid charges against National Finance accountant John Gray who admitted the charges and was jailed for 18 months in November 2010.
National Finance traded as a finance company and invested deposits from the public. It went into receivership in May 2006 owing about 2000 investors $24.8 million.
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