SCF director was 'man of integrity'

17:00, Jun 26 2014
South Canterbury Finance fraud case
IN COURT: Arraigned in the dock at the start of the $1.58b South Canterbury Finance fraud case, from left, are Edward Sullivan, Robert White and Lachie McLeod.

Former South Canterbury Finance (SCF) director Bob White was visibly moved as he was described in court yesterday as a man of integrity, having the nickname "Handbrake Bob" for his cautious approach to the business.

On the 52nd day of the country's biggest fraud trial, former SCF chief financial officer Graeme Brown continued his evidence as part of the defence of former directors Ed Sullivan and White, and former chief executive Lachie McLeod.

The trial is being heard by Justice Paul Heath in the High Court at Timaru.

Brown described himself as having been "lucky enough" to have White as his mentor when he first joined SCF.

"I had to wean myself off Mr White's support," he said.

"Mr White was man of integrity. He and his wife had taken in young children and fostered them and he did work in the greater community too.


"I held him in extremely high regard and in some respects modelled myself on him."

White looked visibly moved when Brown said the charges were "at odds" with the man he knew.

He said late SCF chairman Allan Hubbard and others referred to White as "Handbrake Bob" as he tried to rein in Hubbard.

In an email to Sullivan, White said of Hubbard's business practices: "I am concerned Allan should believe ANZ will be happy little pandas if he sells off good assets in exchange for bad loans.

"We already have a resolution on the books capping loans to a maximum of $10m. Does this not apply to the chairman?"

Asked if Hubbard ignored only White's cautions, Brown said: "Mr Hubbard ignored everyone equally".

A letter was produced showing SCF had been warned by banks to stop saying it had access to $150 million credit, when it could not be drawn against.

Two credit lines were mentioned in SCF prospectus 59, from October 24, 2008.

The Crown argues the credit lines had expired when the prospectus was in place and the prospectus was used to gain access to the Crown's deposit guarantee scheme.

Brown's evidence has been that the credit lines were in place when the prospectus was launched and negotiations were then continuing to extend or replace them.

On April 24, 2009, a letter was sent from BNZ to Brown, urging SCF to stop making public statements about the credit lines, which could not be drawn down.

"The banks have not formally approved extensions of either facility.

"It will not be prepared to fund a drawing request if one is received under the three-year facility [having already expired]. It wishes for the agent on behalf of the banks to cancel the three-year arrangement.

"The borrower continues to state publicly that it has $150m facilities available from two banks . . . such a statement is not correct."

The Timaru Herald