SCF trial draws to a close
New Zealand's longest and most expensive criminal case, the South Canterbury Finance (SCF) trial, has finally drawn to a close.
The trial began 5-1/2 months ago on March 12 at the High Court in Timaru before Justice Paul Heath.
Former SCF directors Ed Sullivan and Robert White, and former chief executive Lachie McLeod, face 18 charges.
The charges were brought by the Serious Fraud Office after SCF's collapse and the resulting $1.58 billion payout under the Crown guarantee scheme.
The charges were laid against the three in late 2011 after chairman Allan Hubbard died in a car crash in September 2011.
The SFO has said Hubbard remained a person of interest.
The case finished with McLeod's counsel, Jonathan Eaton, QC, closing and painting a picture of the former chief executive being out of his depth who had relied on the advice of others, mostly from Hubbard.
"Mr McLeod is not a dishonest man," Eaton said.
"Throughout the course of this trial your honour has been armed with much information to make an assessment of Mr McLeod's true character. Clearly the traits of his character appealed to Mr Hubbard. Hardworking, well liked and loyal.
"The hindsight cynical view would be that Mr Hubbard knew Mr McLeod was not equipped with the qualifications, experience and skill set to carry out what would be the typical CEO role and that might be seen as reflecting a degree of reluctance of Mr Hubbard to lose control."
Eaton described McLeod as being loyal to a fault.
"Perhaps he was too loyal to Mr Hubbard. Perhaps, he like so many others, put Mr Hubbard on a pedestal and placed in him too much faith, trust and reliance. Loyal to a fault? Perhaps. Loyal to the point of knowingly engaging in dishonesty? No.
"The proper verdicts on all counts are verdicts of not guilty."
The law did not recognise guilt by loyalty or guilt by association to Hubbard, he said. "There can be little doubt that Mr Hubbard was an extremely influential and stubborn and determined man.
"However, what immediately distinguishes him from others in a similar positions is that he is undisputed that his driving ambition was to benefit his investors. Personally he was frugal in the extreme and his life was devoid of the trappings of wealth.
"It is important to recognise that there is no suggestion that a single dollar was redirected through fraudulent transactions to benefit any accused."
SCF had enjoyed extraordinary growth between 2005 and 2009.
"However, the essential structures in place did not develop to cope with that level of growth. It is plain that South Canterbury failed to make a successful transition from being a closely held company to being one of the largest finance companies in New Zealand."
When interviewed by the SFO, McLeod described his last 12 months at SCF as being the most stressful of his life, stating: "I was under immense pressure working seven days a week. Unfortunately, this period was poorly led by the chairman, Allan Hubbard." Justice Heath will give his verdicts on October 14.