Three SCF accused not interviewed

18:54, May 10 2014

The defendants in the South Canterbury Finance (SCF) fraud trial were never interviewed on the most serious charge of the case.

All three face a charge of obtaining entry by deception to the Crown Deposit Guarantee Scheme, which paid out $1.58 billion to investors after SCF collapsed in 2010.

The trial of former SCF chief executive Lachie McLeod, and former directors Edward Sullivan and Robert White, before Justice Paul Heath in the High Court at Timaru, continued yesterday. The trio face a combined 18 charges laid by the Serious Fraud Office (SFO).

Sullivan's counsel, Marc Corlett, continued his cross-examination of lead investigator, forensic accountant Anna Tierney yesterday. She was grilled on the investigation into the most serious charge..

When interviewed by the SFO, none of the three was asked about entry to the scheme.

SFO press releases when charges were laid, in 2011, said the alleged $1.58b fraud exceeded ‘anything in the history of white collar crime in New Zealand".


"The investigation itself has been one of the most resource-intensive and time-consuming in recent history," one said. "Given it is a $1.58b fraud, do you think it is odd that the people charged with the biggest fraud in New Zealand are not given the chance to explain?" Corlett asked Tierney.

There were 40,000 documents in the investigation.

"It is sometimes unnecessary to ask a suspect about every document. In some investigations suspects are not interviewed at all," Tierney said.

An email was presented to the court, from White to Sullivan, expressing concerns about former chairman Allan Hubbard, who died in 2011, over related party transactions. White suggested higher authorities needed to bring him into line.

"Allan is obviously struggling with the connotations following on from related party loans. Do you think we should talk to Neil Paviour-Smith [Forsyth Barr], the trustee, or maybe Allan Bollard, Michael Cullen or perhaps Helen Clark [the then Prime Minister].

"I fear ingrained behaviour of the owner [Hubbard] will/can never change."

The week was dominated by ex Tierney and forensic accountant Bradley Porter, who was seconded to the SFO to work on the Hyatt Hotel, Kelt Finance and Shark Wholesalers transactions.

The Timaru Herald