SCF fraud trial to start
It has been a long time coming, but New Zealand's biggest fraud case will finally start in Timaru tomorrow.
The $1.7 billion South Canterbury Finance (SCF) collapse resulted in 21 charges being laid by the Serious Fraud Office in December 2011 against five men.
However, only three defendants remain; former SCF chief executive Lachie McLeod and two former directors - Timaru lawyer Edward Sullivan and accountant Robert White.
Timaru chartered accountant Terry Hutton and former SCF chief financial officer Graeme Brown had charges against them withdrawn last year.
The trial will be held in the High Court at Timaru and has been set down for three to four months before a judge alone, Justice Paul Heath.
Sullivan, 72, faces nine charges, the most of the three defendants. Five charges are for failing to declare related party transactions in SCF prospectuses; for $220 million to Southbury Group and Woolpak, $34m to Woolpak, $64m to Woolpak, $65m to Woolpak, and $19.1m to Shark Wholesalers.
One charge is for transferring $6.8m worth of shares from Hellaby Holdings to Woolpak; one of inaccurately reporting impairment levels of $56.6m and $77.9m in a SCF prospectus; one of breaching the SCF debenture trust deed and one of entering the Crown deposit guarantee scheme by deception.
Sullivan retired in 2011 after 43 years at Timaru legal firm RSM Law. He was on SCF's board from 1990 to 2010.
McLeod, 50, faces five charges. He is jointly charged with entering the Crown guarantee scheme by deception, and breaching the crown guarantee with an advance from SCF of $39m to Hilltop Hotels.
He faces one charge of false accounting and transferring a loan from SCF of $10m to Kelt Finance, which was then advanced to Southbury; a charge of creating a false entry after an advance of $25m from SCF to Hilltop Hotels; and a charge of theft by a person in a special relationship in relation to a loan of $12m from SCF to Dairy Holdings.
He was the SCF chief executive between 2003 and November 2009.
White, 70, faces four charges; one of entering the government guarantee scheme, by deception, and three of failing to declare related party lending in a prospectus of $64m to Southbury and Woolpak, $19.1m to Shark Wholesalers, and $39m to Hilltop Hotels.
He was a SCF board member and director from 1993 to 2009.
The Timaru Herald