The Serious Fraud Office has launched an investigation into South Canterbury Finance.
SFO chief executive Adam Feeley said his organisation had grounds to suspect that a number of related party transactions involving South Canterbury may have involved false statements or other fraudulent conduct.
The investigation follows a National Business Review investigation into shell-games surrounding the ownership of the Hyatt Regency Hotel.
Peter Symes, a 66-year-old retired meatworker and brother-in-law of South Canterbury Director Edward Sullivan, was the sole owner of the Hyatt - and a $42.3m related-party loan - for 18 months from February 2009.
Mr Symes told NBR he was acting on behalf of Mr Sullivan, and three business days after his involvement with the Hyatt was disclosed he abruptly resigned from four other companies connected with Mr Sullivan.
The Hyatt was owned by Regency Auckland, and directors of the company have included Allan Hubbard, Lachie McLeod, Mr Sullivan and Mr Symes. For two months Regency Auckland was owned by Hilltop Trust, a company with lawyer Gregory Shanahan as sole director and shareholder.
“Given the scale of the SCF collapse, it would be neither feasible nor productive for SFO to carry out an investigation into all aspects of the failure. Instead we will focus on specific transactions which we consider may have been a fraud on the investors in SCF and/or the Crown as the guarantor of investor funds,” Mr Feeley said.
Mr Feeley added that the SCF investigation was an entirely separate matter from the SFO’s investigation into the affairs of Aorangi Securities Limited.
“While there are some persons who are common to both cases, the SCF transactions were are currently investigating have no material connection with the affairs of Aorangi Securities," Mr Feeley said.
Mr Feeley added that, subject to receiving any new information from the statutory managers, the SFO was in the closing stages of its investigation into Aorangi Securities.
Mr Feeley said despite the volume of cases which SFO had taken up in recent months, the matter was one which would have a high priority and would be progressed as quickly as possible.
"As is appropriate with a small agency, we will coordinate our efforts with the receivers of SCF; the Registrar of Companies; and the Securities Commission. We will also be engaging private sector insolvency and forensic accounting specialists for external assistance.”
The SFO is currently investigating 22 matters, two of which involve assistance with international law enforcement agencies. Cases under investigation include: Nathans Finance, Lane Walker Rudkin, B’On Financial Services, Capital + Merchant Finance, Aorangi Securities and Belgrave Finance.
It is also bringing 31 prosecutions, including proceedings against persons involved with National Finance; Bridgecorp Ltd; and Five Star Company Group.
Tue, 19 Oct 2010