LWR owner charged with fraud worth $118m

Stacy Squires

CHARGED: Ken Anderson, the owner of LWR Industries, is one of two people charged over alleged fraud at the Christchurch business.

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The owner of LWR Industries, Ken Anderson, has appeared in court to face fraud charges involving $118 million.

The charges follow a two-year investigation by the Serious Fraud Office (SFO).

The 64-year-old Christchurch businessman appeared in the Christchurch District Court yesterday to face 61 fraud charges and 21 charges relating to the alleged use of fabricated documents during his ownership of the textile manufacturer.

The SFO alleges Anderson fabricated financial documents to obtain, and keep, loans with Westpac New Zealand, totalling $118m.

The SFO also alleges Anderson used fabricated documents to obtain funds under a letter of credit provided by Westpac.

The charges cover 2006 to 2009.

LWR Industries, once the nation's largest textile manufacturer, was placed in receivership in April 2009.

A person with name suppression faces eight charges in relation to the Westpac letter of credit.

Both accused are to reappear on October 6, with the SFO to disclose information.

A trial date is not expected this year.

Anderson had to surrender his passport as a condition of bail.

SFO acting director Simon McArley said the maximum penalty for most fraud was a 10-year prison sen-tence.

The SFO investigation started in September 2009, after the receivers for LWR Industries raised concerns.

A SFO team trawled LWR Industries' financial records to reconstruct the company's financial history over a three-year period.

The $118m Westpac loan was a business banking facility, while the letter of credit likely related to money used for purchasing materials or exporting costs, McArley said.

LWR laid off about 300 staff in 2008 and early 2009 before its collapse.

Prior to that, Anderson had bought an Auckland textile manufacturer, Pod, for $22m.

McArley said the alleged fraud had had a profound effect on the region, "with LWR having employed many staff and enjoyed an international reputation".

Canterbury's earthquakes had delayed some of the investigation, McArley said.

The National Distribution Union said it was cold comfort to out-of-pocket LWR workers that criminal charges had been laid.

Union general secretary Robert Reid said many LWR workers had not received full redundancy and holiday pay entitlements.

Anderson had been a rugby commentator on radio and also ran a taxation consultancy.

In its heyday in the 1950s and 1960s, LWR employed about 4000 staff.

- © Fairfax NZ News