Wellington, Oct 3 NZPA - The Companies Office is going after the directors of another failed finance company with the filing of criminal charges against three directors of National Finance 2000 Ltd today.

Jail terms are possible if the charges laid in Auckland District Court against Trevor Allan Ludlow, Anthony David Banbrook and Carol Anne Braithwaite are proven.

"The charges relate to untrue statements in the company's registered prospectus and failure to comply with financial reporting standards," said registrar of companies Neville Harris.

The defendants are due to appear on October 23.

The national enforcement unit of the Companies Office alleges the directors failed to disclose material transactions between National Finance 2000 and related parties.

The directors also face charges under the Securities Act 1978 for stating that they had made proper and adequate provisioning for bad debts and that loans were secured by general security agreements when this was not the case. Prison terms not exceeding five years or fines not exceeding $300,000 are possible if convicted.

Ludlow, a used car dealer, also faces charges under the Financial Reporting Act 1993 for making false or misleading statements about bad debt provisioning, related party lending and general security agreements. A prison term not exceeding five years or a fine not exceeding $200,000 is possible for these additional charges.

The Serious Fraud Office is also conducting a separate investigation into National Finance 2000.

National Finance 2000 went into receivership in May 2006. The receivers estimate that around $24 million is owed to members of the public and that the likely recovery for secured investors will be about 47 percent to 48 percent of their investments.

Subordinated investors and other unsecured creditors are unlikely to recover anything from the receivership.

National Finance 2000 was the first major finance company to collapse.

The Companies Office is pursuing prosecutions against directors of other finance companies, including Five Star Finance.

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