Spectre looms over fraud hearing

Last updated 05:00 25/03/2014

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The ghost of Allan Hubbard haunted the South Canterbury Finance trial yesterday.

Former director Stuart Nattrass was cross-examined in the trial of former South Canterbury Finance (SCF) chief executive Lachie McLeod, and former directors Edward Sullivan and Robert White at the High Court at Timaru before Justice Heath.

The accused have pleaded not guilty to 18 charges laid by the Serious Fraud Office.

SCF collapsed in August 2010, with $1.58 billion of taxpayers' money paid to investors under the Government's retail deposit guarantee scheme.

The admissibility of evidence was discussed in chambers in the morning, with the trial resuming after lunch.

Mr Nattrass was a SCF director from 2002 to 2009.

He gave evidence about the late Mr Hubbard, who was the majority shareholder and the chairman. He died in a car crash in September 2011.

Sullivan's counsel, Philip Hall QC, challenged Mr Nattrass on evidence he gave last week that Sullivan was the dominant force in the boardroom. "Can I suggest to you that the dominant presence was Mr Hubbard. When Mr Hubbard did make his voice known, his was the only voice that mattered," Mr Hall said.

"I do believe his opinion carried more favour. Mr Hubbard's ability to dictate who was on the board meant he was able to have ultimate authority," Mr Nattrass responded. "Mr Sullivan's [legal] advice was often in favour of the shareholder." Justice Heath asked if decisions reached by the board were departed from, to which Mr Nattrass agreed.

Last week, Mr Nattrass described attempts to remove Mr 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 but got a phone call from an Auckland law firm asking him to leave the Hubbards' house as he was harassing pensioners in their home, he said in evidence. The following day he resigned from the board.

The cross-examination continues today.

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- The Timaru Herald


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