22 Jul 2014

Contradictory evidence at SCF trial

10:29 am on 22 July 2014

A defence witness in the South Canterbury Finance case has given contradictory evidence.

Former directors Bob White and Edward Sullivan and former chief executive Lachie McLeod are defending 18 fraud charges at the High Court in Timaru relating to the $1.7 billion collapse of the company in 2010.

Terrence Hutton, a former for the company, on Monday told the court that he had no knowledge of South Canterbury Finance ever owning Auckland's Hyatt Hotel, one of the transactions at the heart of the case.

Mr Hutton said such a move would have been ill-advised, as hotel management was not the core business of a finance company.

However, an email exchange between Mr Hutton and Mr McLeod shows he provided advice on various ways to transfer shares in the hotel to a South Canterbury subsidiary.

Earlier, Mr Hutton told the court Mr White was a stickler for complying with financial reporting rules. He said Mr White was a mentor to him, and described his own role as accountant at the firm and Mr White as that of gatekeeper.

Ideas would be floated but not acted on if they contravened the law, he said.

"Ideas would get bounced around - can we do this or that - and it would be considered in light of the legislative requirements and obligations.

"If it was in conflict to any of those requirements, well then the idea would get thrown out."

Mr Hutton said at one stage, when he advised Mr McLeod that a particular transaction would contravene reporting rules, Mr McLeod criticised him for being negative and not supporting his vision for growing the company.

Mr Hutton originally faced two charges of false accounting in relation to the case but these were later withdrawn.

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

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