- Source: ONE News
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- SFO charges five people over South Canterbury Finance
- Jean Hubbard ‘knew nothing’ about alleged fraudwatch
The five people alleged to be involved in the biggest white-collar crime in New Zealand, said to be worth $1.7 billion, are due to appear in the Timaru District Court on Monday.
This follows a lengthy investigation into South Canterbury Finance (SCF).
Speculation has been rife in South Canterbury since the 21 charges were filed by the Serious Fraud Office (SFO) five weeks ago.
The Timaru Herald sought to have the names released by the court, but an application to Judge Joanna Maze ended with the file being sealed until Monday.
The five face 21 charges, each of which carries a maximum sentence of seven to 10 years in prison.
Their appearances on Monday are not guaranteed.
Their legal counsel could seek a registrar’s adjournment to a later date.
If they appear, their identities may remain secret in the short term if name suppression is granted, or an unsuccessful bid for name suppression is appealed to the High Court.
The SFO spent 14 months investigating the case after SCF collapsed on August 31, 2010, triggering a $1.6 billion taxpayer bailout.
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This followed a failed recapitilisation bid by chairman for life Allan Hubbard and then chief executive Sandy Maier.
Hubbard died on September 2 last year after a car crash. SFO chief executive Adam Feeley said he had remained a person of interest in the inquiry until his death.
The SFO had also laid 50 fraud charges against Hubbard relating to his private investment vehicles Aorangi Securities and Hubbard Management Funds, but were dropped after his death.
While Feeley would not comment further on the case until after Monday’s court date, he said he would not be in Timaru for the first scheduled appearance.
“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.”
The charges allege 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 collapse of SCF was one the most significant of all the failed finance companies,” Feeley said.
“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 and time-consuming in recent history.
“The total estimated value of allegedly fraudulent transactions is approximately $1.7b, which includes an estimated $1.58b from entering the Crown retail deposits guarantee scheme.
“Given the number of commercial transactions SCF was involved with, we have not investigated all transactions concerning SCF.
“We have not ruled out the possibility of investigating other matters, but our priority will be to progress the current charges through the court.”
Feeley said Hubbard’s widow, Jean, was not facing charges as she was not a director or an employee of, nor a professional adviser to, SCF.
The SFO had worked closely with the Financial Markets Authority on the case.
Authority chief executive Sean Hughes has confirmed it was also examining avenues to take civil proceedings in order to recover some of the money paid out to SCF investors under the government guarantee scheme.
SFO cases
Under investigation:
FinanceCapital Merchant Finance
South Canterbury Finance
Convictions obtained:
Waipawa Finance: Former director Warren Pickett – sentenced to five years in prison.
National Finance: Former director Trevor Allan Ludlow – sentenced to five years and seven months in prison. Company accountant John Gray – sentenced to 18 months imprisonment, reduced on appeal to nine months’ home detention.
Five Star Finance: Former director Nicholas Kirk – sentenced to two years and eight months in prison; Former director Marcus McDonald – sentenced to two years and three months in prison; Former director Anthony Bowden – sentenced to nine months’ home detention and 300 hours’ community work (Securities Act charges). One further individual awaiting trial.
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