Lane Walker Rudkin owner Kenneth James Anderson is "a broken man" after his clothing firm's $100 million collapse.
The 66-year-old was sentenced yesterday to six years in jail for a massive fraud that left him bankrupt after he "risked everything" to keep the firm trading.
The union that represented Anderson's former workers said the sentence was too light for the damage he did, while a former worker said the ego of his ex-boss had been "brought down".
The Crown called for a 14-year sentence, while the defence argued for a starting point of seven years.
Judge Jane Farish said Anderson had lost everything and was "a broken man".
Anderson's dealings with Westpac Bank involved loans totalling $100m and left the bank with losses totalling $70m. Crown prosecutor Brent Stanaway said the bank had relied on the integrity claimed by Anderson.
Anderson sent 36 financial statements to Westpac from 2006 to 2009, all of which falsely indicated LWR was in good financial health.
Stanaway described the reports as "largely fictitious".
Judge Farish said the references she had received spoke highly of Anderson. "One of the things that sets you apart in this series of frauds is that you risked everything. You have not hidden any of the assets you acquired in the course of your career.
"Everything was subject to a personal guarantee. You have lost everything. You are now reliant on superannuation. You now don't have a home . . . You are very much a broken man."
Judge Farish said Anderson had provided the bank with "massaged accounts", which did not reflect the internal management accounts provided by his own accountants.
Anderson pleaded guilty to four representative charges of using a document with intent to defraud, before his Christchurch District Court trial was scheduled to start on October 14.
Defence counsel Kirsten Gray said Anderson had incorrectly reported on the state of LWR because of the difficult period the company was in, a situation that developed from the devastating effects of Chinese imports and the high value of the New Zealand dollar. Judge Farish said the amount of the loss - about $70m - did not reflect his level of culpability.
The figure included $37.8m from the actual loss and another $31m from the cost of the firm's receivership in 2009.
Gray said the figure took into account the proceeds from the sale of the company's assets, including its properties, and the sale of Anderson's own assets because he was the guarantor for the loans. She said he was ashamed and devastated.
Stanaway said Anderson's offending arose from his desire to maintain personal standing in the business community, as well as the prestige and status of LWR.
Judge Farish said the New Zealand apparel company was a long-standing Canterbury entity and Anderson bought it in 2001.
The high New Zealand dollar made it increasingly difficult to trade and the company was hit by the loss of one of its largest customers, which switched to a Chinese provider for its products.
When the company was placed in receivership in 2009, the total credit facility provided to the LWR group amounted to $100m.
Judge Farish noted Anderson had written to the bank to express his shame and regret.
He was trying to keep a business afloat, she said.
After the sentencing, the southern region secretary at First Union, Paul Watson, said he felt the jail term was light considering Anderson's conduct and the impact on the more than 300 LWR workers.
While many of the employees had found alternative work, there was still a sense of disillusionment.
Former employee Jack Taylor said there would be some satisfaction for former employees that a man of Anderson's ego had been "brought down".
- with Fairfax NZ
- © Fairfax NZ News
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