Wellington, Oct 23 NZPA - The Serious Fraud Office has laid charges against two men at Auckland District Court for their roles in a failed motor vehicle finance company.

National Finance 2000 Ltd collapsed in 2006 owing investors more than $21 million. Three years later, director Allan Ludlow and a second man who has interim name suppression face charge s.

The defendant whose name is suppressed is charged with making false entries in a statement to auditors and incorrectly recording the payments of a property in Fiji.

Both men face a joint charge of lending $1.3m to related parties, breaching the company's trust deed, and two other charges of lending more than $2.6m to related parties, in amounts that exceed the 2 percent prescribed ratio of the company's total tangible assets.

As required under the Securities Act and Regulations, National Finance operated under the terms of a trust deed, common to all finance companies.

The trust deed laid restrictions on how investors' money could be used, to whom it could be lent, and how much could be lent to parties relating to directors, such as spouses and relatives.

SFO director Grant Liddell said there were several investigations looking into failed finance companies.

"Where offending is disclosed, the Serious Fraud Office is determined that such offending will be prosecuted with the full force of the law," he said.

"Dishonestly using investors' funds contrary to terms of the trust deed is a criminal offence and it will be prosecuted where available evidence exists."

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