Anderson 'lost everything' on LWR
Lane Walker Rudkin owner Kenneth James Anderson is "a broken man" after his six-year jail sentence for the massive fraud that led to the clothing firm's $100 million collapse.
Anderson was sentenced in the Christchurch District Court yesterday for the fraud that left him bankrupt after he "risked everything" to keep the firm trading.
The union that represented Anderson's former workers says the sentence is too light for the damage he did, while a former worker believes his ex-boss' ego has been "brought down".
The Crown had called for a 14-year sentence for Anderson, 66, while the defence argued for a starting point of seven years.
Judge Jane Farish said Anderson had lost everything, and was "a broken man".
Anderson's dealings with Westpac bank involved loans totalling $100m and left the bank with losses totalling $70m. Crown prosecutor Brent Stanaway said the bank had relied on the integrity claimed by Anderson.
Anderson sent 36 financial statements to Westpac from 2006 to 2009, all of which falsely indicated LWR was in good financial health.
Stanaway described the reports as "largely fictitious".
Judge Farish said the references she had received spoke highly of Anderson. "One of the things that sets you apart in this series of frauds is that you risked everything. You have not hidden any of the assets you acquired in the course of your career.
"Everything was subject to a personal guarantee. You have lost everything. You are now reliant on superannuation. You now don't have a home . . . You are very much a broken man."
Judge Farish said Anderson had provided the bank with "massaged accounts", which did not reflect the internal management accounts provided by his own accountants.
Anderson pleaded guilty to four representative charges of using a document with intent to defraud, before his Christchurch District Court trial was scheduled to start on October 14.
Defence lawyer Kirsten Gray argued for a starting point of between seven and nine years' jail.
She said Anderson had incorrectly reported on the state of LWR because of the difficult period the company was in, a situation that developed from the devastating effects of Chinese imports and the high value of the New Zealand dollar.
Judge Farish agreed. She said the amount of the loss - about $70m - did not reflect his level of culpability. The figure included $37.8m from the actual loss, and another $31m from the cost of the firm's receivership in 2009.
Gray said the figure took into account the proceeds from the sale of the company's assets, including its properties, and the sale of Anderson's own assets because he was the guarantor for the loans.
She said he was ashamed and devastated.
Stanaway said Anderson's offending arose from his desire to maintain personal standing in the business community, as well as the prestige and status of LWR.
Judge Farish said the New Zealand apparel company was a long- standing Canterbury entity. Anderson bought it in 2001.
The high New Zealand dollar made it increasingly difficult to trade, and the company was hit by the loss of one of its largest customers, which switched to a Chinese provider for its products.
When the company was placed in receivership, in 2009, the total credit facility provided to the LWR group amounted to $100m.
Judge Farish noted Anderson had written to the bank to express his shame and regret.
He was trying to keep a business afloat, she said.
After the sentencing, the southern region secretary at First Union, Paul Watson, said he felt the jail term was light considering Anderson's conduct and the impact on the more 300 LWR workers.
"He had responsibility as a general manager and major shareholder to be upfront about the true nature of the company. There was a whole lot of smoke and mirrors going on."
While many of the employees had found alternative work there was still a sense of disillusionment. "Here was a leading local and New Zealand manufacturer; it was a tragedy what happened and you can attribute that to one man."
Former employee Jack Taylor said Anderson looked like a "beaten man" in court. Taylor worked for LWR for almost 20 years before being made redundant.
The company had been a "New Zealand icon" for more than 100 years. Taylor said there would be some satisfaction for former employees that a man of Anderson's ego had been "brought down".
"But most have got on with their lives."
A Christchurch woman prosecuted for a document fraud offence related to the Lane Walker Rudkin collapse has been convicted and fined, but is allowed to stay in business.
The woman was fined $2000 but granted name suppression, which will allow her to stay in business.
Christchurch District Court Judge Jane Farish said the businesswoman was still entitled to trade on her good name and she would be allowed final name suppression for "unique and compelling reasons".
The suppression means the 65-year-old will be able to continue working with business contacts overseas in an area where her defence counsel Allister Davis said: "Name and reputation is everything."
The woman pleaded guilty to one charge of dishonestly using a document, relating to her recovery of a $300,000 loan she had made to LWR.
She pleaded guilty on the fifth day of a trial in a prosecution brought by the Serious Fraud Office.
Davis said the woman, a first offender, was not seen as a risk of reoffending. The offence was "an aberration created by circumstances".
Judge Farish imposed a $2000 fine on the charge of dishonestly using a document to obtain a financial advantage.
- with Fairfax NZ