Huljich hit with fine over Kiwisaver
Auckland businessman Peter Huljich has been convicted and fined $112,632 after pleading guilty to misleading the public with investment statements issued by his company related to its KiwiSaver scheme.
The company, Huljich Wealth Management, also pleaded guilty on two other charges and was today fined $239,000 plus $95,265 in legal and court costs.
Huljich was seeking to be discharged without conviction, but Auckland District Court Judge Brooke Gibson found that he must have known parts of the investment prospectus were incorrect and ''if he did not know then he should have''.
The judge said he had not seen sufficient evidence that Huljich's commercial career had been affected by the court case, nor that it would be affected by a conviction.
Huljich twice ''topped up'' returns from HWM's KiwiSaver scheme using his own money, artificially inflating the performance of the scheme which was then shown in public investment statements to be New Zealand's leading scheme.
Judge Gibson characterised the offence as ''gross negligence or recklessness'', but not at the most serious, dishonest end of the offending scale.
Outside court, Huljich gave a brief comment.
''I'm pleased that we got the opportunity to put our side of the story forward and I'm looking forward to moving on''.
The judge said his good character references, cooperation with the Financial Market Authority's investigation, the damage already done to his reputation and his early guilty plea brought the fine down from an initial starting point of $187,500.
He said there was no investor money lost due to the offence but the public's confidence in the KiwiSaver market, and the investment market in general, had been undermined.
The maximum fine for each of the three charges was $300,000.
In December 2007, HWM's unit trusts invested in a company called Diligent Board Member Services, of which Huljich was then a director.
However when Diligent's share price dropped Huljich felt responsible for the unit trusts' losses and decided to compensate unit holders with his own funds as well as underwrite any ongoing losses.
The initial compensation took the form of $1.3m worth of shares in NZ Finance which were sold to HWM unit trusts at a minimal price, which indirectly benefitted HWM's KiwisSver scheme investors by about $8600.
Huljich repeated the process in October 2008 by asking a broker to purchase $150,000 worth of shares and transfer them directly into the KiwiSaver scheme.