18 Mar 2014

Ex-SCF director 'forced to resign'

10:35 pm on 18 March 2014

A former director of failed company South Canterbury Finance has told a court he was forced to resign after trying to remove chairperson, the late Allan Hubbard.

The company's former chief executive, Lachie McLeod, and former directors Edward Sullivan and Robert White face 18 fraud charges at the High Court in Timaru relating to the $1.6 billion collapse of SCF in 2010.

The charges, brought by the Serious Fraud Office, include theft by a person in a special relationship, false statements by a promoter, obtaining by deception and false accounting.

On Tuesday, former director Stuart Nattrass gave evidence, saying he was concerned about how Mr Hubbard was running the board of directors.

Mr Nattrass said Edward Sullivan was the only source of legal advice for the board, and Mr Hubbard was reluctant to pay for outside advice when it was asked for. He said he asked for it on several occasions, but it wasn't provided.

He also told the court how Mr Hubbard appointed Lachie McLeod as the chief executive without consulting the rest of the board.

In August 2009, Mr Nattrass initiated a vote of no confidence in Mr Hubbard, who found out about it and threatened to fire him. Mr Nattrass said he resigned the next day.

Mr Nattrass said South Canterbury Finance's assets shot up from $400 million in 2002, to about $2 billion in 2010, and its structures and processes weren't adjusted to deal with the rapid growth.

Alan Hubbard died in a car crash near Oamaru in September 2011 aged 83 - three months before any charges were laid over South Canterbury Finance.

From left: Edward Sullivan, Robert White and Lachie McLeod.

From left: Edward Sullivan, Robert White and Lachie McLeod. Photo: Mytchall Bransgrove