Sir Douglas Graham to keep knighthood

02:25, Nov 01 2013
tdn doug stand
KNIGHTHOOD KEPT: Sir Douglas Graham after being sentenced.

Prime Minister John Key has indicated Sir Douglas Graham was considering giving up his knighthood before Key's decision not to strip the former justice minister of it.

Key said today that he would not revoke Graham's knighthood after his conviction for making false statements in a company prospectus.

The Supreme Court last week turned down an application for an appeal against their convictions by Graham and three fellow directors, including another former justice minister, Bill Jeffries, but it granted them leave to appeal against their sentences.

Key said that now that Graham had exhausted his legal options to appeal against his conviction, it was appropriate to make a decision on his knighthood.

"I have given the matter a lot of thought in the period since it first went to court in 2011," he said.

"I took into account the ongoing financial hardship that many Lombard investors suffered as a result of the company's collapse. Many people through no fault of their own have lost some or all of their future financial security, and that is an awful position to be placed in."

He said three factors influenced his decision.

Graham received his knighthood for his leadership role in Treaty settlements and he was convicted of a strict liability offence, where dishonest or criminal intent was not required for conviction.

Key said the High Court found that Graham and the other defendants acted honestly at all times, genuinely believed the statements in the amended prospectus were true and that careful attention had been given to the contents of the amended prospectus, including taking legal advice.

"Third, in both New Zealand and in the United Kingdom, it has been very rare for honours to be cancelled," he said.

"In those cases where it has occurred, it has often been because the actions that led to the cancellation were in the same area as that for which the original honour was awarded. This is not the case with Sir Douglas."

He said Graham, who retired from Parliament in 1999, had left a significant legacy in the area of Treaty settlements.

"New Zealand is a better country today because of the work Sir Douglas did as Treaty negotiations minister, and my judgment is that he deserves to retain his knighthood," Key said.

For similar reasons, Key said, he would not recommend to the Queen or the governor-general the cancellation of honours held by Jeffries and Lawrence Bryant.

Key said in Auckland this afternoon that his decision might be difficult for Lombard investors to accept, "but on the other side of the coin I think Sir Doug has paid a very heavy personal price".

He had spoken with Graham last night - in what he said was the first time in several years as he sought to remove himself from the process - to inform him that he would be making the announcement today.

"I think he understood the rationale behind my decision-making but was quite prepared to accept whatever decision that we made, and I think in the end he'll make his own decision whether he is going to use the knighthood and the title in the future," Key said.

He said revoking the knighthood would have set a precedent "that you would then genuinely apply to lots of people that get honours".

Key said Graham might have returned the knighthood himself had he not made the decision for him.

Such a decision was for the prime minister of the day to make, rather than the affected person, Key said.

"So I made that decision. It's my responsibility to make it and whether people think its a good or bad decision, that responsibility has to rest with me," he said.