The Serious Fraud Office failed to consider key evidence in
the $1.7 billion South Canterbury Finance investigation which
has led to charges against two senior executives being
Adam Feeley, the head of the SFO when charges were laid two
years ago, described the 14-month inquiry as the "most
resource-intensive and time-consuming in recent history". He
said the "value of the fraud alleged to have been committed
exceeds anything in the history of white-collar crime in New
The agency laid 21 charges against five SCF executives for
fraudulent transactions alleged to total $1.7 billion -
including $1.58 billion from the government bailout after the
finance company collapsed.
But charges against two of the accused have been withdrawn
before the case reached trial, most recently accountant Terry
Hutton who faced two charges alleging false accounting in
relation to the recording of a $25 million loan advance and a
$10 million loan advance.
"What had been touted as the South Canterbury Five is now
down to three," Hutton said.
"I believe the withdrawal of the charges reflects the poor
standard of investigation work initially undertaken by Adam
Feeley and his investigation team."
His defence team of leading barrister Jonathan Eaton QC and
forensic expert Gib Beattie - a former assistant director of
the SFO - were able to reconstruct the transactions with the
lawyer for Graeme Brown, another SCF accused whose charge was
They were able to do this with information provided by the
SFO under the discovery process, along with other documents
which Hutton said had been supplied to investigators but
"apparently not considered relevant".
This evidence, with supporting explanations, was provided to
prosecutors who in turn discussed the material with Simon
McArley, who was the acting head of the SFO after Feeley's
McArley, who has since resigned after Julie Read was
appointed as a permanent replacement, determined that both
charges against Hutton fell short of the Solicitor-General's
guidelines for prosecution and should be withdrawn.
The trial of the three remaining defendants, Lachie McLeod,
Edward Sullivan and Robert White, is set down to start in the
High Court at Timaru in March.
Feeley did not respond to a request for comment.
- Jared Savage of the NZ Herald