Ex-New Zealand premier loses appeal, ordered to pay $3.9M for role in construction firm collapse

By Esra Tekin

ISTANBUL (AA) – Former New Zealand Prime Minister Jenny Shipley was ordered to pay NZ$6.6 million ($3.9 million) plus interest for her role in the collapse of a construction company, the country's top court said on Friday.

Shipley and the other three directors, Richard Yan, Clive Tilby, and Peter Gromm, were found to have breached company regulations, Wellington-based RNZ News reported.

The Supreme Court rejected the four directors' appeal and upheld lower court rulings that they violated the Companies Act by continuing to trade while insolvent and relying on limited commitments from Mainzeal's parent company, Richina Pacific group, that it would repay a NZ$44 million loan with interest.

"The directors were aware of the precariousness of Mainzeal's position," the court judgment said.

Mainzeal was liquidated in February 2013 while Shipley was chairperson of its board, owing creditors, including many smaller New Zealand building companies, over NZ$110 million, the daily Stuff reported.

The company's liquidators, Andrew Bethell and Andrew McKay from BDO, sued Shipley and three other Mainzeal directors, claiming that they had allowed the company to trade in a manner likely to cause serious loss to creditors since January 2011, in violation of the Companies Act, it added.

In 2019, the High Court in Auckland found the four directors liable for NZ$36 million in damages.

Shipley became New Zealand's first woman prime minister, serving from 1997 to 1999.