Published 8 December 2011
The Serious Fraud Office has laid 21 charges against 5 individuals following its 14-month investigation into South Canterbury Finance Ltd.
Financial Markets Authority chief executive Sean Hughes said yesterday the authority was also examining avenues to take civil proceedings to recover some of the money paid out to South Canterbury Finance investors under the Crown retail deposits guarantee scheme.
SFO chief executive Adam Feeley said the charges were filed in the Timaru District Court yesterday but he wouldn’t name those charged: “Until such time as the charges are first heard before the court and any issues regarding suppression have been fully dealt with, it would not be appropriate to make any comment on which individuals have been charged.”
Mr Feeley said the total estimated value of allegedly fraudulent transactions was about $1.7 billion, which included an estimated $1.58 billion from entering the guarantee scheme.
He said the charges alleged a variety of offences, including theft by a person in a special relationship, obtaining by deception, false statements by the promoter of a company and false accounting. The offences carry maximum penalties of 7-10 years’ jail.
“The collapse of South Canterbury Finance was one of the most significant of all the failed finance companies. The value of the fraud alleged to have been committed exceeds anything in the history of white-collar crime in New Zealand, and the time we have taken to complete this matter is a reflection of that scale.
“It is not appropriate at this point to comment on details of the allegations, but the investigation itself has been one of the most resource-intensive & time-consuming in recent history.”
Kerryn Downey & William Black (McGrath Nicol & Partners (NZ) Ltd) were appointed receivers of the finance company headed by the late Allan Hubbard on 31 August 2010.
28 October 2011: Background on South Canterbury’s admission to guarantee scheme
28 October 2011: South Canterbury Finance receivers pay Government $395 million
1 September 2010: Receivers enter South Canterbury Finance after it fails to secure backer
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Attribution: SFO release, story written by Bob Dey for the Bob Dey Property Report.