13 Nov 2015

Disadvantaged children's charity struck off

5:50 am on 13 November 2015

A charity for disadvantaged children has been deregistered from the list of official charities, after its boss used it to loan millions of dollars to his own property projects.

A Government investigation found the Southern Cross Charitable Trust, which originally set up the Kiwi Can scheme, made low-interest loans to risky building projects - which have since folded.

But manager Bob Wickham, 82, insists any revenue that was made went to the charity, that he was naive about how it should be run, and he had made no money personally.

Official findings

In its report, Charities Services, which comes under the Department of Internal Affairs, said it was approached by Inland Revenue in 2012, concerned the movement of funds looked like a tax avoidance scheme.

The investigation found money would be transferred to the charity, from there to a managing trust, and from there to whichever of Mr Wickham's projects needed it.

The Companies Office lists him as a director for over 40 businesses.

Huge amounts of money went through the charity, but little was being made in donations in return.

For example, the report says in 2009, $7.27 million moved in and out of the Southern Cross Charitable Trust, but for the same year, it donated only $8,633.

Monetary movements in previous years totalled $15.67m (2007) and $8.68m (2008).

In 2011, the charity's donations were $298.

Mr Wickham said the financial system was a way to make money, but for the charity rather than him.

"They could earn interest on the funds that were put in there. The interest earned could go towards our youth work.

"I certainly didn't get any money out of it and in fact after we'd finished and when we'd stopped, we were very hard up."

Mr Wickham did not agree there was a conflict of interest, and said the system, which was also overseen by the accountant, genuinely tried to make money for the charity.

"I accept probably we had some mismanagement, but there was no dishonesty or fraud or trying to deceive them. We were just quite probably naive, ... in the way we did things, probably.

"There was no money laundered or taken out by individuals anywhere. I never took a penny out of Southern Cross, and no individual did. It was just done to projects and those projects failed."

Losses to the Trust

Charities Services said charities were allowed to raise money through investments, but its Registration Board said these low-interest loans later resulted in losses to the Trust.

The value of the loans was not known and there was a lack of supporting paperwork.

Mr Wickham said his property developments were hit hard by the global downturn, and lost a lot of value.

The report said Mr Wickham's actions showed serious wrongdoing, were "grossly negligent" and "constituted gross mismanagement."

"If there's any blame, it's me, isn't it?" Mr Wickham said.

"I don't mind whatever I'm meant to look like. Any mismanagement was in my judgement in property.

"I tried to explain to IRD this was a very genuine effort to provide funds for youth in New Zealand. Obviously, I didn't win."

The Southern Cross Charitable Trust has since been deregistered.

The Serious Fraud Office said it was aware of the charity but was not investigating, while the former accountant for the charity has since been declared bankrupt.

Kiwi Can was taken over by another entity some years ago, and has no connection to the Southern Cross Charitable Trust.

Mr Wickham, who lives in Opotiki, said he was living a humble and poor life, and concentrating on work within his local church.