SCF moneyman lost marriage, career over dropped charge
Being charged in the South Canterbury Finance (SCF) case cost its chief financial officer his marriage and his career, the High Court in Timaru was told.
Former SCF chief financial officer Graeme Brown, who was chief financial officer from 2006 until January 2010, gave evidence yesterday as part of the defence of SCF directors Ed Sullivan and Robert White, and chief executive Lachie McLeod.
The three face 18 charges brought by the Serious Fraud Office (SFO) following the $1.58 billion collapse of SCF. A single charge against Brown was dropped in August last year.
Facing the charge "had a profound effect on my life," he told Justice Paul Heath.
"There was the loss of my relationship and a change in career."
Brown had been interviewed by the SFO and requested the transcript of the interview. He became frustrated when it had not been provided.
A SFO staff member said Brown had become aggressive during a phone call, and said Brown was trying to derail the trial.
"How could I do that [derail the trial]?" Brown said. "I was frustrated and agitated and I apologised."
The charge against Brown was one of false accounting, by transferring a $10 million loan from SCF to Kelt Finance, which was then advanced to Southbury. The SFO later dropped the charge.
Brown told the court the transaction was legitimate.
He said he was concerned that impaired loans had not been truthfully recorded, as the late chairman Allan Hubbard would buy them at face value.
In an email Brown said "we continue to defy gravity and report great results by fudging the truth.
"The market will not be able to work out how, after enduring three tough years really well and as New Zealand is about to come out of recession, we suddenly fall to the floor."
Hubbard's approach to loans likely to default was to buy them at face value and manage them himself, he said.
"In terms of SCF accounts the loans didn't exist as they had been repaid at face value."
Hubbard and his wife had also signed to underwrite any SCF losses suffered.