The Serious Fraud Office has issued five court summons' following its investigation into failed South Canterbury Finance.
The summons related to 21 charges filed in the Timaru District Court today.
The NBR understands some charges include allegations of false accounting.
Those summonsed are required to appear in the Timaru District Court on January 16.
The SFO has not responded to NBR questions this afternoon.
Former South Canterbury Finance director Stuart Nattrass told the National Business Review he will not be charged by the Serious Fraud Office.
"I've spoken to my legal representative and he said the Serious Fraud Office told him I'm not a person of interest," Mr Nattrass said.
NBR calls to other former directors and executives have not yet been returned.
The Financial Markets Authority says it has completed its criminal investigation of South Canterbury Finance (SCF) and will support the Serious Fraud Office’s case against five individuals involved with SCF’s affairs.
FMA CEO Sean Hughes says the FMA will supply particulars of false statements in two SCF prospectuses to support some of the 21 charges filed by the SFO.
The untrue statements relate to the level of loan impairments and the availability of banking facilities, Mr Hughes says.
He says the FMA was examining avenues to take civil proceedings in order to recuperate some of the moneys paid out to SCF investors under the Crown Retail Deposit Guarantee Scheme.
South Canterbury chairman, the late Allan Hubbard, was facing 50 fraud charges relating to his private investment vehicles Aorangi Securities and Hubbard Management Funds at the time of his death in September.
South Canterbury Finance collapsed in August last year triggering a $1.775 billion taxpayer payout to investors under the Crown Retail Deposit Scheme. Receivers have struggled to make recoveries from South Canterbury with the net taxpayer liability soaring past $1 billion.
SFO investigations are understood to have centred on three or four large transactions, including the Hyatt hotel in Auckland and South Canterbury's dealings with Hawke's Bay subsidiary Kelt Finance, now called SCF Hawkes Bay.
NBR last year broke the news that ownership of the Hyatt hotel underwent bewildering changes just prior to South Canterbury entering the government guarantee scheme.
Christchurch man Peter Symes, the brother-in-law of South Canterbury director Ed Sullivan, was made the sole owner of the hotel.
The loan, later revealed as South Canterbury’s largest property advance, was not disclosed as related-party in prospectuses and Mr Symes' relationship to Mr Sullivan was only identified by Treasury inspectors mere months before the company collapsed.
The SFO seized NBR notes and tapes relating to Mr Symes at the onset of its investigation.
Receivers sold the hotel in December and despite a purchase price said to be $55 million, South Canterbury is understood to have booked tens of millions of dollars in impairments on its second mortgages.
Until June 2010 Kelt Finance had been 75% owned by South Canterbury in a joint venture designed to extend the Timaru-based company’s presence in the Hawke’s Bay area.
While the activities of Kelt Finance were financed by South Canterbury, Kelt Finance was not charged under the trust deed of the Southern lender.
The most recent South Canterbury report before receivership noted that $39.1 million was advanced to Kelt Finance.
NBR understands that most of the loans purportedly made by Kelt Finance were in house, with Mr Hubbard Southbury Group the largest recipient. This was a way of allegedly moving some of the related party loans out of South Canterbury
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Listen to the week's top business news in NBR Radio's weekend review
- Matthew Hooton discusses Labour's extreme left takeover
- Rodney Hide on how the TPP debate has become a moral argument
- Wick Nixon on how she's saving parents' sanity, one lunchbox at a time
- Tim Hunter talks about the legal dispute between Pyne Gould Corporation and Bath Street Capital