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Sir Douglas to retain knighthood - Key

Prime Minister John Key has decided against stripping former Lombard Finance & Investment chairman Sir Doug Graham of his knighthood after the Supreme Court upheld his conviction last week.

The Prime Minister based his decision on the fact that Graham was knighted for his leading role in the Treaty of Waitangi settlement process, the fact that the conviction was one of strict liability, meaning dishonest or criminal intent didn't have to be proved, and that it was very rare for honours to be cancelled, he said in a statement. Bill Jeffries and Lawrence Bryant will also retain their honours for similar reasons, he said.

"New Zealand is a better country today because of the work Sir Douglas did as Treaty Negotiations Minister and my judgement is that he deserves to retain his knighthood," Key said. "Sir Douglas retired from Parliament in 1999 leaving a significant political legacy in the area of treaty settlements that subsequent Labour and National-led governments have worked to build on."

Key said he had given the matter a lot of thought since it first went to court in 2011, and took into account "the ongoing financial hardship that many Lombard investors suffered as a result of the company's collapse."

Some 4,400 Lombard Finance investors were owed $127 million at the time of the firm's receivership in April 2008.

Last week, the country's top court turned down an attempt by former Justice Ministers Graham and Jeffries, and by Bryant and Lombard's ex-boss Michael Reeves to appeal their convictions for signing off on false statements by omission in the finance company's prospectus, saying there was no appearance of a miscarriage of justice, and that the appeal didn't raise a point of law of general or public importance.

The bench, made up of Chief Justice Sian Elias and Justices William Young and Susan Glazebrook, did grant the men leave to appeal their sentences, particularly as to whether imprisonment was necessary.

The Lombard Four received harsher sentences earlier this year after the Crown appealed the non-custodial terms dished out by the High Court.

Jeffries was sentenced to eight months' home detention and 250 hours community work and Reeves was sentenced to nine months home detention and 250 hours community work, having both initially been sentenced to 400 hours community work.

Graham and Bryant were each sentenced to six months home detention and fines of $100,000 apiece. Graham had his sentence of community work reduced to 200 hours from 300 hours.

All four avoided jail time when sentenced in March last year, when Justice Robert Dobson said the offending was much less serious than that involving other failed finance companies, such as Bridgecorp. They had been found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008 and the Crown had initially sought jail terms.


Comments and questions

Mates don't take other mates knighthoods.

A good decision by John Key.

A really bad decision by Key, in my opinion. National's reputation has dropped amongst us voters. Young voters are really angry about getting penalized under the high LVR restrictions. Now Key is backing a 'criminal' who is involved in a public fraud. Not a good look.

It's a shame because National has done a great job in getting the country out of the recession and back into the black. I reckon National will lose next year and progressive residents like me will be gutted.

The High Court specifically held that Graham was honest, so to say he was involved in a public fraud is neither correct nor fair.

No solace for the investors who relied on the misleading prospectus to invest and then lost their investments.

A clear signal to the market that the old boys club is still more important than justice for investors.

Anyone who makes an investment on the basis of a politician's financial nouse is an idiot and will get exactly the justice their foolishness deserves.

Obviously you want vindication of your foolishness and a scapegoat, not justice.

The only idiots here are you and Doug Graham, Alan.

A lot of investors are just Mum and Dad investors - totally unsophisticated who rely on honesty and integrity and unfortunately think former politicians with knighthoods must know what they are doing as directors of finance companies.

Quite frankly Sir Doug didn't perform and let the investors down - no argument there

Tosh. Sir Doug didn't perform as a professional director because he wasn't one - just a politician out to pasture. He's been caned for incompetence at a job he wasn't trained for, not for dishonesty. At least one retired judge thinks it was a gross injustice.

Mum and dad investors are entitled to be idiots. They are not entitled to have other people punished for their stupidity.

Doug is a man of impeccable breeding and credentials. Just because he kept on soliciting for more investor money when Lombard was fatally hemorrhaging, is no reason why he should relinquish his Knightgown.

The PM said :The High Court found that Sir Douglas and the other defendants acted honestly at all times, genuinely believed the statements in the amended prospectus were true, and that careful attention had been given to the contents of the amended prospectus, including taking legal advice."

Either the director-defendants were incompetent and didn't know their jobs or what 'fiduciary' means, or in delivering his findings, the learned judge couldn't find his glasses.
If, in their professional ignorance the defendants "genuinely believed"... since when did ignorance of the law become a defence?

My understanding is that they accepted incorrect advice from staff. That has nothing to do with ignorance of the law. You are dissembling.

Notwithstanding any faulty advice that may have been delivered by staff, the buck still stops with the directors, who are responsible for good governance of the organisation both in policy and in practice. So not only did they not know bad advice when they heard it, they failed to ensure their company had proper operational mechanisms or checks & balances in place to ensure bad advice was properly tested and rejected. And at least two of these failed commercial governors were 'respected' MP's who were charged with governing our nation and in delivering multi-hundred-million dollar decisions - spending your money and mine - regarding Treaty claims? Did they recognise bad advice or a rort when they were working on the claims, or were they similarly spending our money on the basis of 'incorrect' or vested advice?
And if they weren't ignorant of the law in respect of finance companies and the duties incumbent on them as directors, why didn't they obey the law and discharge their duties competently?

He rightly deserves a conviction for ther Lombard mess, and for all the reasons why he was awarded the knighthood these to matters should be kept seperate.

I still regard him is one of our better politcians and overall he deserves to keep his knighthood.

So relieved John key is finally showing the 'principled' man he really is rather than the manufactured sham produced by the Crosby Textor Myth Spinners.. If anything should finally wake those still considering supporting or voting for the unethical and lacking integrity Ex Derivatives speculator trader masquerading as a World leader and business man this week should have demonstrated how dumb that would be.. Between the Meridian shares gone to the NY Bank, condoning US spying on Allies, to his supporting those who also use their status to rip off New Zealanders. Banks and Graham John Key really showing his true colours now! They have stars and stripes by the way.. Some of us saw that way back in 2002 incidentally...

Parents aren't allowed to give this generation's kids a tap on the bum for correction purposes - so they will never understand correc tion and discipline - but last generation's mayors are allowed to get away with deceit and adultery, and the previous generations MP's are allowed to get away with multi-million frauds. What can we expect of this generation's kids in 2 generations time?

Has anyone lost a knighthood in this part of the world since Sir Albert Henry (with his suitcase full of money and free flights for voters)? I can think of one or two palagis who would be well ahead of Sir Doug Graham in any dishonour list

He deserves to keep his knighthood due to his settling of Waitangi Claims and his work in a previous national government.
Those who lost their money in Lombard were mislead because they were greedy and believed the prospectus so they deserve to lose it. When you are of an age you invest conservatively not into cowboy get rich quick schemes. I have some sympathy for them but not much.

Doug Graham does not deserve his knighthood on the basis of the treaty settlements.

He in fact at the time instructed the Select Committee dealing with the Ngai Tahi settlement to in effect ignore the reportedly nearly 400 submissions in relation to the this Bill - subsequently well described as a swindle - on the grounds that he and Jim Bolger had already signed the bill - in a vote-buying move by National.

This was a disgraceful business.

Much of the treaty settlement process has subsequently been quite simply well described as arguably fraudulent. Moreover, Graham knew that Geoffrey Palmer's establishment of the Waitang Tribunal was a deeply undemocratic move, and a wrong one - but later supported it.

He also quite wrongly described the Treaty of Waitangi as a "partnership" between Maori and the British Crown, when it was nothing of the sort - and never has been, either on legal or any other grounds.

In other words, he has been one of a number of determined politicians who have arguably caused much divisiveness and damage to this country.

Who on earth respects the knighthoods any more?