The highest court in New Zealand has ordered former Prime Minister Jenny Shipley to pay NZ$6.6 million ($3.9 million), plus interest, as compensation for her role in the collapse of a construction company, according to a judgement released on Friday.
Shipley, who served as New Zealand’s first female prime minister from 1997 to 1999, was the chair of the board of Mainzeal, a construction firm that went into liquidation in 2013 after facing financial difficulties for several years.
The liquidators of the company filed charges against Shipley and directors Richard Yan, Clive Tilby, and Peter Gromm, alleging that they allowed the company to operate in a way that posed a serious risk of loss to creditors and incurred debts that could not be repaid. The Appeal Court had previously ruled in favor of the liquidators.
The Supreme Court upheld the previous ruling and ordered the four directors to pay NZ$39.8 million plus interest to Mainzeal creditors. The judgement stated that Yan was the most responsible and held him liable for the entire amount of compensation, while Shipley, Tilby, and Gromm were each capped at NZ$6.6 million and interest.
The lawyers representing Shipley, Tilby, and Gromm issued a statement expressing their clients’ disappointment at the dismissal of their appeal. They also conveyed their regret for the collapse of Mainzeal and its negative consequences for employees, customers, and creditors. The statement mentioned that they will take time to assess the implications of the court’s decision.
Yan’s solicitor did not immediately respond to a request for comment, and his lawyer stated that he had no instructions to comment on the case.
Mainzeal liquidator Andrew Mckay welcomed the court’s decision, describing it as a landmark judgment that reinforces directors’ obligations to fulfill their duties diligently and responsibly.
($1 = 1.6883 New Zealand dollars)
(Reporting by Lucy Craymer; Editing by Lincoln Feast.)
Credit: The Star : News Feed
