Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
The five former directors and executives of failed Timaru lender South Canterbury Finance will stand trial in the High Court next February after losing a bid to keep the hearing in the district court.
The Crown was successful in its bid to have former directors Ed Sullivan and Bob White, and former chief executive Lachie McLeod, former chief financial officer Graeme Brown and former company accountant Terry Hutton tired in the High Court, according to a judgment today.
Justice Paul Heath "reached a firm conclusion that the trial should be transferred to the High Court for hearing" to commence either judge alone or by jury on February 10, 2014, he said. The trial may take between 12 weeks and 16 weeks, the judgment said.
The 21 charges relating to fraud, dating back to between November 2004 and February 2010, and are linked to the $1.58 billion paid out to debenture holders covered by the retail deposit guarantee.
The most serious allegations are against Messrs Sullivan and White, whom the Crown asserts "each was a party to the making of deliberately false statements in prospectuses", the judgment said. Messrs Sullivan, White and McLeod are alleged to have used false financial statements to secure cover in the government's guarantee scheme.
"An allegation that a company director has made deliberately false statements to induce members of the public to invest money in a company which ends up in receivership owing some $1.58 billion to its investors is extremely serious," Justice Heath said.
"The gravity of the alleged offending is heightened when one has regard to the allied allegation that false financial statements were used to gain entry to a guarantee scheme for which, the Crown alleges, South Canterbury was not, in fact, a qualifying applicant.
"In my view, the gravity of the alleged offending is such that it overwhelmingly tells in favour of a transfer to the senior trial court within the judicial hierarchy," the judge said.
The Executive Judge of the District Court with responsibility for Christchurch and Timaru told the judge that without "significant additional judicial resources" the district court could not accommodate a trial before the second half of next year, Justice Heath said.
Another factor in bumping it up to the High Court was the "self-evident" level of public interest in the case.
"The circumstances in which so much money was lost is a significant public concern; the more so when the allegation of false financial information to obtain entry to the guarantee scheme is added to the mix," he said.
The trial will take place in Timaru unless an order is made for a change of venue, the judgment said.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Reserve Bank to press ahead with plans to carve out property investment lending
- Wool prices hold at elevated levels as volumes decline
- Australian Music: Queensland Symphony Orchestra
- Hellaby Holdings sells packaging division to Coveris for $30m
- OPINION: More than you bargained for: Corporate acquisitions carry a new cyber-threat