Former CBL Group CFO Carden Mulholland breached market continuous disclosure laws, New Zealand’s High Court has found in a landmark decision.

The Financial Markets Authority says it is the first time the courts have considered the liability of a CFO acting as an accessory to a company’s contravention under the act, and the ruling is a significant step in actions brought in relation to the CBL Corporation (CBLC) collapse.

“It sets an important precedent for holding a CFO accountable for an entity’s continuous disclosure breaches and provides judicial guidance for senior executives of listed entities in respect of the continuous disclosure requirements,” FMA head of enforcement Margot Gatland said.

The trial took place before Justice Ian Gault from late June to early August last year. Another hearing on the penalty will be held in coming months.

In-court settlements were separately reached with CBLC, MD Peter Harris, and former independent non-executive directors in 2023 and 2024, with the court imposing financial penalties after they admitted contraventions.

Justice Gault found Mr Mulholland had the required knowledge and participation in conduct to make him personally liable, as an accessory, to three continuous disclosure contraventions, while he was found not liable on two causes of action.

The breaches included the need for CBL to strengthen its reserves by about $NZ100 million ($90 million), which was known by the company by January 25 2018 but not disclosed to the market until February 5.

FMA is also pursuing proceedings against CBL, Mr Harris, Mr Mulholland and the estate of former non-executive director Alistair Hutchison over documentation supporting CBL’s initial public offer. A six-week trial in the Auckland High Court is scheduled to begin on April 13 next year.

CBL listed on the NZX Main Board in 2015 and entered voluntary administration in February 2018. 

The decision is available here.