8 Aug 2014

Former CEO breached deed, court told

10:45 pm on 8 August 2014

The prosecution has told the South Canterbury Finance trial that the company's former chief executive knowingly breached the company's trust deed.

Former directors Edward Sullivan and Robert White, and former chief executive Lachie McLeod are on trial at the High Court in Timaru on 18 fraud-related charges over the collapse of the finance company in 2010.

Crown prosecutor Colin Carruthers said Mr McLeod had full knowledge of the trust deed but breached it in approving a $12 million loan to Dairy Holdings Limited.

Mr Carruthers said the company's lending could not exceed 35 percent exposure of shareholders funds, and Mr McLeod knew the loan to Dairy Holdings would push lending above the threshold but approved it anyway.