Lombard directors, including former Cabinet ministers Doug Graham and Bill Jeffries, did not mislead investors, the Court of Appeal has heard today.

The pair, along with Lombard chief executive officer Michael Reeves and director Lawrence Bryant, are fighting to overturn convictions resulting from the collapse of the finance company.

All four were found guilty of four charges under the Securities Act relating to the responsibilities of directors for misleading statements made in prospectus to attract investor funds.

Graham and Bryant were sentenced to 300 hours' community work and ordered to pay $100,000 reparation, Reeves and Jeffries to 400 hours' community work.

All four were in court in Wellington to hear their lawyer, Jim Farmer, QC, outline their appeals at the start of what is expected to be a four-day hearing.

The Crown has also appealed against the sentences imposed.

Farmer said the prospectus accurately warned investors of the liquidity risk and omitting specifics did not make it misleading.

The trial judge had misdirected himself about the responsibilities of directors to make sure the prospectus is accurate and not misleading by omission.

The judge had thought the prospectus was misleading because it did not say how the forecast of loan repayments had been wrong in successive months, and the amount of cash on hand was reducing.

The judge also found that the directors believed the information in the prospectus was accurate and they had confidence in the loan managers, but those beliefs were not held on reasonable grounds.

Farmers said the judge had not left enough room for the judgment of the directors. It was not a case where a misrepresentation was made, he said.

Directors should not overwhelm investors with a massive amount of detail, Farmer said.

Lombard Finance was put into receivership in April 2008, owing $125 million to 4400 investors, four months after the prospectus went out.

Farmer said alleged inaccuracies in the prospectus did not lead to the company's collapse.

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