A Christchurch technology firm has come under fire for failing to practice due diligence after one of its directors was found to have lied about a previous bankruptcy.
Blair Bryant filed for bankruptcy in the US in 2007 before being discharged the following year – however, he failed to disclose the information to Powerhouse Ventures, despite being explicitly asked in his application.
Bryant has since been forced to step down as chairman of the firm but remains on the board because directors can only be removed by a shareholder vote – unless they resign voluntarily.
Spokesperson Greg Slade told Fairfax Media that the bankruptcy wouldn’t necessarily have prevented Bryant from joining the board but the deception put his credibility under question.
“People have their ups and downs, but the fact he didn't make that declaration made his position untenable to lead the company,” said Slade.
Now, the firm – which is listed on the Australian Stock Exchange – is facing criticism over its ineffective background checks.
"It doesn't reflect well on anyone. We feel misled and some shareholders are asking why we didn't do our due diligence,” Slade told Fairfax. “Well we did, but we didn't go back 12 years ago. We took it as read. It's not a good situation all round.”