SFO expert swamped by Hyatt loan data
Just six weeks before the South Canterbury Finance (SCF) trial, an expert witness was given 10,000 documents to consider.
Former SCF chief executive Lachie McLeod and former directors Edward Sullivan and Robert White are on trial before Justice Paul Heath in the High Court at Timaru on 18 charges laid by the Serious Fraud Office (SFO).
Yesterday the expert witness, forensic accountant Bradley Porter, was cross-examined by Marc Corlett, who represents Sullivan.
Porter was seconded by the SFO for the SCF case in May 2011. Six weeks before the trial started, on March 12, he was sent the extra documents to review in relation to two key transactions referred to in the trial - the lending to the Hyatt Hotel and to Shark Wholesalers. The Crown contends both were related party loans.
In his cross-examination yesterday, Corlett quizzed Porter about his previous experience. He had finished his study in 2008 and began fulltime employment as an accountant in 2009. He was seconded to the SFO with two years' experience.
Corlett wanted to know how much direction Porter had given on charges being laid, following his investigation into the transactions. He said he just provided the information.
He was asked why he had made amendments to his brief of evidence.
"The SFO provided extra information for me to consider," he said.
The Hyatt Hotel transaction, a loan of $25 million, is crucial to the entry of SCF into the Crown deposit guarantee scheme. If the transaction is found to be to a related party, it should have been declared in the application for entry to the Crown scheme.
The defendants' involvement in preparation of the application will determine their culpability. All three defendants have been charged with obtaining by deception in relation to SCF's application and subsequent entry into the guarantee scheme.
The Hyatt loan has also given rise to a charge of theft by a person in a special relationship as it allegedly breached the Crown guarantee terms, which stated that SCF could not enter into any agreement that exceeded 1 per cent of SCF assets without prior consent, and had to be carried out at "arm's length".
In relation to the loan of $5.2m to Shark Wholesalers, Sullivan and White face a charge of making a false statement by a promoter for not disclosing the lending in a SCF prospectus.