Former New Zealand leader must pay millions in compensation

Photo: Reuters

A judge has ordered a former New Zealand prime minister to pay several million dollars in compensation for her role in the collapse of a construction company.

Dame Jenny Shipley was the nation's first female leader, serving from 1997 to 1999. After leaving politics, Shipley in 2004 began serving as board chair of the company Mainzeal.

The company collapsed in 2013, owing creditors 110 million New Zealand dollars ($76 million).

On Tuesday, High Court judge Francis Cooke found the directors had engaged in reckless trading by using money owed to subcontractors to continue operating over several years.

The judge found Shipley had acted in good faith and not for personal gain.

Shipley was ordered to pay NZ$6 million ($4.1 million) as part of a NZ$36 million finding against the directors.

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