19 Jun 2014

SCF trial hears from lawyer

12:38 pm on 19 June 2014

The High Court in Timaru has been told a former director of South Canterbury Finance did not have a conflict of interests when his law firm advised a subsidiary of the now-collapsed company.

The defence case is under way in the trial of South Canterbury Finance's former chief executive Lachie McLeod and former directors Edward Sullivan and Robert White, who face 18 fraud charges relating to the $1.7 billion collapse of the company.

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

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

Edward Sullivan was once a partner at RSM Law. A partner at the firm, John McGlashan, told the court on Thursday he had no concerns about the way Woolpak Holdings was advised when represented by his law firm.

He said at the time time it was common for solicitors to take a nominal shareholding in a company. Mr Sullivan held 1% of Woolpak when RSM represented it.

Earlier, forensic accountant Karen Greenwood outlined a range of related party loans made by South Canterbury Finance.

She said her analysis of the 2008 accounts given to Treasury when the company applied for the Retail Deposit Guarantee Scheme showed that in October it had total assets of $1.97 billion.

She said a loan to subsidiary company, Hilltop, equated to 3.2 percent of the total assets.