Three directors of Capital + Merchant jailed after being found to have intentionally breached the failed finance company's trust deed have lost their appeals against conviction and sentence.

In a judgment released today the Court of Appeal dismissed the appeals of Neal Nicholls, Wayne Douglas and Owen Tallentire, describing some of the related-party transactions at the centre of the prosecution's case as "commercially breathtaking".

Nicholls and Douglas, represented by Bruce Gray, QC, argued the High Court had erred in finding that breaches of the trust deed were intentional, and overstated their level of culpability in handing down a sentence.

But the appeal court judges - Justices Rhys Harrison, Terence Arnold and Lynton Stevens - upheld the finding that the trust deed breaches were intentional.

"We are satisfied that the inferences available to prove the intention element were compelling," the judgment said.

Nicholls and Douglas were sentenced in the High Court in Auckland in August to seven and a half years in prison, while Tallentire was handed a five-year jail sentence.

The directors argued their offending was not at the level of criminal theft or fraud, and home detention should have been considered.

The justices also rejected the appeal against sentence, and said entertaining home detention or community service was out of the question.

"Messrs Nicholls and Douglas have been convicted of theft by a person in a special relationship to the sum of $19.76 million. Mr Tallentire has been convicted of the theft of $12.1m. Simply put, this is theft on a grand scale," the judgment said.

"The appellants elevated their own self-interest above the interests of the depositors who had trusted them. They helped themselves to various soft loans, ignoring not only the strict requirements of the trust deed but also the most elementary of prudential lending requirements," the judgment said.

Capital + Merchant collapsed in November 2007 owing 7000 investors a total of $167m. Because of prior charges, receivers have indicated all these funds should be written off.

- © Fairfax NZ News