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Copy of Enforceable Undertaking

View Enforceable Undertaking in PDF format.

3 September 2003

This undertaking is offered to the Securities Commission for acceptance under section 69J of the Securities Act 1978 by:

Bridgecorp Investments Limited ("Bridgecorp")
Level 14
Bridgecorp House
36 KitchenerStreet
PO Box 3805
AUCKLAND

And the director of Bridgecorp ("the director"):

R M Petricevic
Level 14
Bridgecorp House
36 Kitchener Street
AUCKLAND

Background

In May and June 2003, a magazine published an advertisement relating to a Capital Notes offer by Bridgecorp, a company carrying on business as a financier. The advertisement referred to an offer of securities to the public. The advertisement was modified from a media release prepared and distributed by the marketing agency for Bridgecorp.
The advertisement was not an authorised advertisement as defined in section 38 of the Securities Act 1978 ("the Act") in that it did not refer to an investment statement. The advertisement could also be construed as indicating the total assets of the borrowing group without also stating the amount of total liabilities of the group in contravention of regulation 12(b) of the Securities Regulations 1983 ("the Regulations").
Neither the marketing agency nor Bridgecorp personnel considered the advertisement to be an "advertisement" for the purposes of section 2A of the Act as the advertisement did not directly solicit funds but sought to give information as to a variation of the terms contained in Bridgecorp's offering documents. The advertisement was not checked for compliance with the Act or regulations. No certificate under regulation 17 of the Regulations was signed.
Bridgecorp's investment administration team logs all calls received from the general public. The caller is asked specifically how s/he has heard about Bridgecorp or to what advertisement or notice s/he is responding. Over 60 calls were logged but no caller stated that s/he was making an enquiry as a result of the advertisement. Bridgecorp therefore believes that no funds were received by it from the public as a result of the advertisement.
Bridgecorp's solicitors have corresponded with the Commission about the advertisement and acknowledge the Commission's concerns about the matter. Bridgecorp's solicitors have acknowledged that it is difficult to support the view of Bridgecorp's personnel having regard to section 2A of the Act.
Bridgecorp and its director wish to remedy the situation and to ensure that no similar events occur. They have offered the undertakings set out below. The Commission has agreed to accept these undertakings under section 69J of the Securities Act 1978.

Undertakings

Bridgecorp will make no further use of the advertisement as published in the magazine and will prohibit any Bridgecorp employee or agent from making any further use of the media release previously distributed to the media.
Bridgecorp and the director will not distribute or permit the distribution by any person of any advertisement containing or referring to an offer of securities to the public unless the advertisement has been prepared or reviewed by appropriate professional advisers.
Without limiting paragraph 8 above, Bridgecorp and the director will take all reasonable steps to ensure that no agent distributes or permits the distribution of any advertisement other than one prepared or reviewed by Bridgecorp and its professional advisers.
The director of Bridgecorp will take all reasonable steps to ensure compliance by Bridgecorp, its officers, agents and employees with the applicable undertakings.
Bridgecorp and the director will prepare a written compliance plan ("Plan") to ensure that its advertising complies with the securities laws and ensure that Bridgecorp employees are familiar with, and adhere to, that Plan.
Bridgecorp will provide a draft of the Plan to the Commission for its review within 4 weeks of the date of this undertaking.
Bridgecorp will ensure that its agents and employees who prepare advertising for Bridgecorp are in the case of employees appropriately trained and in all other cases aware of the law's requirements relating to advertisements for securities and that all external marketing advisers and agents are instructed to obtain approval in writing from Bridgecorp prior to placing any advertisements in any media on behalf of Bridgecorp.
Bridgecorp will arrange for the Plan to be updated annually and will procure that its auditors report on its compliance with the Plan annually.

Acknowledgments

Bridgecorp and the director acknowledge that this undertaking does not derogate from the rights and remedies available to the Commission or to any other person or entity arising from the conduct described in the undertaking.
Bridgecorp and the director acknowledge that the Commission's acceptance of an enforceable undertaking under section 69J of the Securities Act 1978 does not affect the Commission's power to investigate future conduct of any person, to take any action or exercise any power under the Act or under any other legislation, or to refer any matter for criminal prosecution or seek any civil penalty.
Bridgecorp and the directors acknowledge that the Commission:
1. May issue a media release referring to the undertaking and to the concerns of the Commission which led to the undertaking being executed;
2. May from time to time publicly refer to the undertaking; and
3. Will make this undertaking available for public inspection.

Signed for and on behalf of Bridgecorp Investments Limited by its duly authorised officer:

[R M Petricevic]

Signed by the director of Bridgecorp Investments Limited:

[R M Petricevic]
Director

Accepted by the Securities Commission pursuant to section 69J of the Securities Act 1978 by its authorised delegate:

[Liam Mason]

[Dated this 27th day of August 2003]

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