SCF fraud trial stuck amid legal arguments
Another week has passed but little progress has been made in New Zealand's largest fraud trial.
The trial of former South Canterbury Finance (SCF) chief executive Lachie McLeod, and former directors Edward Sullivan and Robert White, ground to a halt for a second time on Wednesday after hearing evidence from an SCF insider.
The trial is set down for three to four months at the High Court at Timaru, before Justice Heath.
The accused have pleaded not guilty to 18 charges laid by the Serious Fraud Office (SFO) in December 2011. SCF collapsed in August 2010, with $1.58 billion of taxpayers' money paid to investors under the Government's retail deposit guarantee scheme.
The final receivers' report showed $805 million has been recovered through selling assets.
The admissibility of evidence has been the latest stumbling block at the trial.
The case adjourned for the second time on Wednesday, with the court session resuming in chambers at noon yesterday and then set to resume on Monday after lunch.
So far, only one of the 41 Crown witnesses has been called - former SCF director Stuart Nattrass.
He described attempts to remove SCF chairman and majority shareholder Allan Hubbard from the board.
On August 20, 2009, a vote of no-confidence in Mr Hubbard as chairman was passed, seconded by Sullivan and agreed to by White.
After the meeting Mr Nattrass went to Mr Hubbard's house.
"Then I got a call from an Auckland law firm asking me to leave the Hubbards' house as I was harassing pensioners in their home," he said.
"The following day I resigned."
He gave evidence about board dynamics, telling the court that because Mr Hubbard was quiet during board meetings, Sullivan took the lead and determined the way minutes were recorded.
Mr Nattrass also detailed a number of transactions which the Crown argues were to hide related party transactions.
Defence counsel will cross-examine Mr Nattrass on Monday.
The trial began on March 12 but was adjourned the following day, after the Crown's opening, for a defence application for Justice Heath's recusal to be considered.
The three Queen's counsel acting for the defendants had called for Justice Heath to recuse himself from the case due to a comment by SFO director Julie Read at a conference, where she said: "We are very fortunate to have Justice Heath as our trial judge".
They argued it showed a perception of partiality and required the trial to be aborted.
Justice Heath was chairing the conference. The case resumed on Monday with the recusal application rejected.
Justice Heath said while he thought the comment was unfortunate, he had the impression Ms Read was pleased that a person with some experience in the area was presiding over the trial.
- The Timaru Herald