The settlement covered the redundancy. It didn't cover the $273K loan to his own company
A former managing director's bid to use his employment exit deal as a legal shield has fallen flat at New Zealand's Employment Relations Authority.
The executive joined Geneva Finance Limited as group chief financial officer in August 2006. By June 2007 he was a company director, and in May 2008 he was appointed managing director - a role he held until August 2023.
But it is what happened between those dates that has landed the matter in two separate courts.
Before joining the board, the executive set up his own private company. Through an agreement with Geneva Finance's holding company, that private company acquired shares in the holding company - funded by a $273,711 loan from Geneva Finance itself, repayable at eight percent interest per year.
Then came the amendment.
In October 2007, with the executive now sitting on Geneva Finance's board, the loan was renegotiated. The interest rate dropped from eight percent to zero. The Authority calculated the benefit to the executive at more than $100,000 in total.
The timing is hard to miss. Within weeks, Geneva Finance imposed a moratorium on investor repayments, owing more than $130 million at the time.
The loan fell due in October 2012. It was never repaid. The executive's private company was removed from the Companies Office register in April 2013. The $273,711 remains outstanding.
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