The former chief of New Zealand’s Investment Savings and Insurance Association (ISI) Vance Arkinstall will “strenuously defend” civil and criminal charges that he allegedly misled investors.

Mr Arkinstall resigned as ISI CEO on Thursday after he and five other directors of North South Finance were charged with deceiving investors over the financial state of the former Dominion Finance Group subsidiary.

The criminal and civil charges allege investors were given misleading or incorrect information over party transactions, lending standards, loan qualities and liquidity.

“While I am disappointed to be leaving the ISI after 10 years as CEO, the recent announcement that I am to face charges resulting from my role as an independent director of Dominion Finance means that it would not be appropriate that I continue as CEO of ISI,” he said. “Therefore resignation is the proper course.”

ISI Chairman Sean Carroll says Mr Arkinstall’s resignation is intended to preserve confidence in the association.

Mr Arkinstall faces up to five years’ jail or fines of $NZ300,000 ($242,000) under the criminal component of the commission’s case, and could also be fined up to $NZ500,000 ($403,000) under civil pecuniary provisions.

Dominion Finance Group purchased North South Finance in 2005 for $NZ40 million ($32 million) in cash and shares. It went into receivership in September 2008 owing investors $NZ176.9 million ($142.9 million).

North South is able to keep operating under a moratorium, despite owing investors $NZ50 million ($40.4 million).