4 Feb 2020

Former CBL group chief executive denies SFO criminal charges

3:48 pm on 4 February 2020

The former chief executive of the collapsed CBL group has pleaded not guilty to criminal charges brought by the Serious Fraud Office.

18072016 Photo: Rebekah Parsons-King. Wellington High Court.

Photo: RNZ / Rebekah Parsons-King

Peter Harris denied five charges of theft by person in special relationship, two of obtaining by deception, and one of false accounting in the district court in Auckland.

The SFO alleges he intentionally left information out of CBL's 2014 annual report, knowingly breached orders by the Reserve Bank of New Zealand by authorising any or all of a series of payments worth more than $62 million to overseas companies and obscured other transactions in a fraudulent way to deceive regulators.

The charges carry a maximum term of up to seven years imprisonment, with one carrying a term of up to 10 years.

He did not seek name suppression, but requested a jury trial, and was remanded on bail to re-appear at the end of April.

A second person, whose name was suppressed until the end of this month, also pleaded not guilty to charges of theft by a person in a special relationship, obtaining by deception, and false accounting.

Documents allege the person withheld information from shareholders, as well as breached RBNZ orders and deceived regulators between 2014 and 2018 by not disclosing the purpose of an EU$12.5m (NZ$21.4m) term deposit CBL had with the National Bank of Samoa.

CBL Insurance provided specialist insurance policies for the building industry, and had extensive operations in Europe and Australia.

The company was forced into liquidation at the end of 2018 after the Reserve Bank and other regulators raised concerns about its financial solvency.

That triggered the collapse of the broader CBL Group.

Shareholders in the parent company, which listed on the stock exchange in 2015, have started civil action against Harris and other CBL executives to recover losses.

The Financial Markets Authority has also lodged civil proceedings alleging breaching of disclosure rules, and misleading and deceptive conduct.

CBL was worth about $750 million when it collapsed.

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