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Tuesday, August 06, 2013

Treasury accountability for SCF... nil.

The Hubbard collapse reaches the courtroom at last.

Timaru Herald:
Five men will plead this morning in the High Court at Timaru to charges arising from the $1.58 billion collapse of South Canterbury Finance. The five defendants, Edward Sullivan, Robert White, Graeme Brown, Terry Hutton and Lachie McLeod, will be arraigned at 10am to plead to a total of 21 charges, which were brought by the Serious Fraud Office in 2011.
The charges allege that the accused acted dishonestly, primarily in relation to the issue of prospectuses, between November 2004 and February 2010. South Canterbury Finance was placed in receivership on August 31, 2010, owing $1.58b, which triggered a payout under the Crown deposit guarantee scheme.
The 12- to 16-week trial has been set down to start on February 10, 2014. For the next three days Justice Heath will hear pre-trial applications in the High Court at Timaru.
The Crown has applied to have the trial heard by a judge alone, rather than a jury. An application has also been made to move the trial to Christchurch, which will be heard on Thursday.

And who acted dishonestly in the Treasury when they accepted the entry of SCF into the Crown guarantee scheme? The timing of the entry - at the 2008 election when there was seemingly no political oversight - puts that responsibility with the Treasury.  Whoever signed it off has cost the Crown almost a billion dollars all up. What did those officials have the duty to know (and did not), what could they reasonably have suspected was the case with SCF and what did they suppress? Hopefully these facts will emerge from the evidence.

The charges include that SCF did not enter the deposit scheme in good faith:
Edward Oral Sullivan [...] one of entering the Crown deposit guarantee scheme by deception.
Lachie John McLeod [...] Jointly charged with entering the crown guarantee by deception
Robert Alexander White [...]  A charge of entering the government guarantee by deception

But what sort of good faith was Treasury exercising with this deal? If they are part of the deception they should be charged as co-offenders.


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