'H-Fee' pair say Key not in the frame

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Two former 1980s financial high flyers jailed after the so-called "H-Fee" deal are backing National leader John Key as he fends off Labour's attacks on his credibility.

Former Equiticorp boss Allan Hawkins and Australian-based expat and former Elders Merchant Finance executive Ken Jarrett have both confirmed Key's claims he had nothing to do with H-Fee.

The term H-Fee, used by Labour's Trevor Mallard to heckle Key in the house, refers to a $66.5 million fee allegedly paid to Hawkins in back-dated foreign exchange transactions through 1987-88. It related to an underwriting commitment by Elders over a $A500m ($NZ574m) 4.4% parcel of shares in Australia giant BHP, held by Equiticorp Tasman subsidiary Beid Pty. The deal contributed to both men being jailed for fraud.

Last week, in a pre-emptive strike, Key told media he had been interviewed by the Serious Fraud Office as part of its investigation.

Former SFO head Charles Sturt has also backed Key's story, saying he was "never, ever in the circle of those who had a close involvement".

The comments come as Labour tries to dent Key's credibility, linking him, under parliamentary privilege, with H-Fee, leaky homes and allegedly misleading documents filed at the Companies Office.

Key has effectively batted away the accusations as public sentiment including from those whose names are being used to try to attack Key turns against Labour's tactics.

Allan Hawkins, now chair of Cynotech Holdings in Newmarket, Auckland, said he'd never heard of the National leader until Key had come back from overseas, years after his stint at Elders.

Hawkins said he didn't get involved in politics, but "I don't like the way they carry on. I can't see what the point of it is. Wouldn't it be better if government just got on with running the country and making it a better place for us? There are some economic clouds on the horizon, manufacturing is taking a hammering, wouldn't it better if they weren't playing these silly mud-slinging games and just get on with the job?"

Hawkins said he was "intrigued" when Key's name came up. "I didn't remember his name from way back then, and I'm sure I would have remembered his name. That (suggestion) came out of the blue as far I was concerned."

Hawkins gives an annual donation of about $100 to the National Party and has met Key at a business breakfast. "He is a good crossover between the business sector and the political thing," he said. "They are two completely different elements of life and it would be better to have a government that was more business friendly. The present government doesn't seem to have business experience nor care about business."

Hawkins said Equiticorp gave $250,000 to Labour in 1986 during pro-free enterprise Finance Minister Roger Douglas's four-year stint under Prime Minister David Lange and a "substantially lesser" amount to National the same year. "I expect if (Labour) are being fair they will mention that as well," he said.

Jarrett, regarded in the 1980s as one of Australia's best finance directors, is now with CJT Capital in Melbourne. He told the Sunday Star-Times it would be "grossly unfair to say (Key) was involved in it".

Key has said he was interviewed by the SFO about a lunch he had with Paul Richards, his successor at Elders, who had left to meet Jarrett. Jarrett confirmed he had met Richards and said "that was right at the beginning" of the deal-making.

Sturt said he was defending Key after having received a media call linking the politician with H-Fee in 2006. That story never gained traction but, after it was raised in the house, Sturt wanted to clarify Key was "only ever a bit player" who could have "assisted us in clarifying one or two issues as to what this fellow Jarrett was up to".

Mallard refused to comment further yesterday and Key, said a spokesman, was on a "pre-arranged weekend away with his wife" and unavailable for further comment.

- © Fairfax NZ News