A man who went into business with Southland man Paul Graham Yeo had known him for 20 years, the Invercargill District Court has been told.
He had trusted Yeo, who had possession of the company's chequebook, and signed cheques believing the money would be used towards setup costs and legitimate business expenses.
Yeo, 55, is on trial in the Invercargill District Court before Judge Michael Turner, and faces 118 theft and fraud charges relating to more than $600,000.
The charges include theft by a person in a special relationship, dishonestly using a document, obtaining by deception, causing loss by deception and forgery. He has pleaded not guilty to all charges.
Three charges have been withdrawn since Tuesday.
Yesterday, Graham Laidlaw said Yeo had approached him asking if he wanted to go into business.
The pair set up Southern Agriculture and Bailing Ltd. Yeo was to supply the tractor and Laidlaw would supply the bailing gear, he said.
The pair set up a bank account for the business and a chequebook was delivered to Yeo. Each cheque required two signatures.
Laidlaw could recall signing some blank cheques when they started up the business. He said Yeo told him they would be used to pay GST and other costs to get the company up and running.
Some of the cheques were used for legitimate business purposes while others were not, he said.
The court was told the first cheque was deposited into Yeo's personal account and later used to pay the company the tractor was purchased from.
That payment was not authorised and should not have come from the company's account, Laidlaw said.
Several cheques were discussed yesterday. Some were deposited into Yeo's account, others were used to pay for petrol and Yeo's CRT account, the court was told.
The trial continues today.
- The Southland Times