SFO confirms South Canterbury Finance investigation charges

7 December 2011

SFO confirms charges in South Canterbury Finance Limited investigation

In response to media reports and a statement by the Financial Markets Authority (FMA) regarding charges filed today in the Timaru District Court, the Serious Fraud Office (SFO) has confirmed that it has laid charges following its investigation into South Canterbury Finance Limited (SCF).

SFO Chief Executive, Adam Feeley said that, following a fourteen-month investigation into a variety of transactions involving SCF, the SFO had laid 21 charges against five individuals involved with the company’s affairs.

“However, until such time as the charges are first heard before the Court, and any issues regarding suppression have been fully dealt with, it would not be appropriate to make any comment on which individuals have been charged.”

Mr Feeley, however, confirmed that the charges allege a variety of offences, including theft by a person in a special relationship; obtaining by deception; false statements by the promoter of a company; and false accounting. The offences carry maximum penalties of between seven and ten years imprisonment.

“The collapse of SCF was one the most significant of all the failed finance companies. The value of the fraud alleged to have been committed exceeds anything in the history of white-collar crime in New Zealand, and the time we have taken to complete this matter is a reflection of that scale.

“It is not appropriate at this point to comment on details of the allegations, but the investigation itself has been one of the most resource-intensive and time-consuming in recent history.”

The SFO said that it could not confirm the details of the allegedly fraudulent transactions, or who was alleged to have been involved in each of them.

“However, the total estimated value of allegedly fraudulent transactions is approximately $1.7 billion, which includes an estimated $1.58 billion from entering the Crown Retail Deposits Guarantee Scheme (CRDGS).

“Given the number of commercial transactions SCF was involved with, we have not investigated all transactions concerning SCF.

“We have not ruled out the possibility of investigating other matters, but our priority will be to progress the current charges through the Court.”

Mr Feeley noted that, as with other investigations into failed finance companies, the SFO had worked closely with FMA on the case and that FMA would provide support in relation to some charges.

FMA Chief Executive Sean Hughes said FMA was also examining avenues to take civil proceedings in order to recuperate some of the money paid out to SCF investors under the CRDGS.

ENDS

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