The Southern District Health Board's long-running
multimillion-dollar dispute with South Link Health has been
referred to the Serious Fraud Office, the board announced
The referral follows advice from Auckland forensic
investigation firm Beattie Varley Ltd, hired by the board in
February to look into the matter.
The board would not say how much money was in dispute, but it
may be up to $15 million, if interest is included.
The parties have previously agreed $6.2 million was paid to
SLH, an independent practitioners' association, by South
Island district health boards
for savings SLH achieved on service contracts.
The board has said agreement was reached on spending of
$923,825, but not the remaining about $5.3 million (now
believed to be about $15 million once interest is added).
South Link Health's stance has been that it spent the money
on approved programmes and has no case to answer,
commercially or criminally.
In a brief statement issued by its lawyers, Kensington Swan,
last night, SLH said it rejected any suggestion of fraud.
''At the heart of these allegations is a disputed contractual
relationship. South Link Health has been negotiating with the
DHB for many years to settle this and we are confident that
the SFO will confirm South Link Health's position.''
In its brief media release, the DHB said it was still hoping
to negotiate a settlement with SLH on the dispute as ''a
separate issue to any potential fraud''.
Yesterday board chairman Joe Butterfield and chief executive
Carole Heatly met SLH representatives and informed them of
the SFO referral, the statement said. Mr Butterfield was not
prepared to comment further.
Board member Richard Thomson, who raised concerns with the
auditor-general last year over the Ministry of Health's
apparent inaction over the dispute, said yesterday his
concern all along had been to have the matter properly
Whether the spending of the savings was actually fraud or not
was now ''properly'' the SFO's place to investigate, he said.
Mr Thomson said he still had a ''sense of incredulity'' about
the ministry's failure to thoroughly investigate.
Board management had raised serious concerns which led to the
2010 referral to the ministry audit and compliance unit, the
amount of money involved was large and the Otago board had
previously been the victim of a $16.9 million fraud.
A spokeswoman for Health Minister Tony Ryall said he could
not comment because the matter had been referred to the SFO.
In its statement, the board said the parties had been in
dispute over the extent of savings since 2002. In late 2013,
it became aware the possibility of fraud in the transactions
could not be excluded and ''accordingly referred the matter
to Beattie Varley for investigation''.
However, emails released by previous board chief executive
Brian Rousseau earlier this year showed the suggestion of
fraud was mentioned in correspondence as early as April 2010.