Trial of SCF trio finally at end
Lachie McLeod has been described as being too loyal to late South Canterbury Finance chairman Allan Hubbard and out of his depth as a chief executive, but not a fraudster.
McLeod's lawyer made the remarks in the High Court at Timaru yesterday as New Zealand's longest and most expensive criminal case came to a close.
The trial began 5 months ago, on March 12, before Justice Paul Heath, and 3000 pages of court transcript later it has finished, with the verdict to be delivered in October.
Former SCF directors Ed Sullivan and Robert White, and McLeod, faced a total of 18 charges.
The charges were brought by the Serious Fraud Office after SCF's collapse and the resulting $1.58 billion payout under the Crown guarantee scheme.
In his closing address, McLeod's lawyer, Jonathan Eaton, QC, painted a picture of the former chief executive being out of his depth and relying on the advice of others, mostly Hubbard.
"Mr McLeod is not a dishonest man," Eaton said.
"Throughout the course of this trial your honour has been armed with much information to make an assessment of Mr McLeod's true character. Clearly the traits of his character appealed to Mr Hubbard. Hard-working, well-liked and loyal.
"The hindsight cynical view would be that Mr Hubbard knew Mr McLeod was not equipped with the qualifications, experience and skill set to carry out what would be the typical CEO role and that might be seen as reflecting a degree of reluctance of Mr Hubbard to lose control."
Eaton described McLeod as being loyal to a fault. "Perhaps he was too loyal to Mr Hubbard. Perhaps he, like so many others, put Mr Hubbard on a pedestal and placed in him too much faith, trust and reliance.
"Loyal to a fault? Perhaps. Loyal to the point of knowingly engaging in dishonesty? No.
"The proper verdicts on all counts are verdicts of not guilty."
The law did not recognise guilt by loyalty or guilt by association to Hubbard, Eaton said. "It is important to recognise that there is no suggestion that a single dollar was redirected through fraudulent transactions to benefit any accused."
SCF had enjoyed extraordinary growth between 2005 and 2009.
"However, the essential structures in place did not develop to cope with that level of growth. It is plain that South Canterbury failed to make a successful transition from being a closely held company to being one of the largest finance companies in New Zealand."
When interviewed by the SFO, McLeod described his last 12 months at SCF as being the most stressful of his life, stating: "I was under immense pressure, working seven days a week.
"Unfortunately, this period was poorly led by the chairman, Allan Hubbard."
In closing the trial the judge thanked the accused for "the way you have conducted yourself through this trial in what will have been a very difficult experience".
He will give his verdicts on October 14.
The Timaru Herald