The former risk manager for two failed related finance companies has told a court that related party lending was never raised as a concern by the companies' credit committee, even though it would have broken company policy.
Former director of Dominion and North South Finances Robert Whale, former Dominion Finance chief executive Paul Cropp, and another person who has name suppression have denied charges of theft by a person in a special relationship.
They are on trial at the Auckland High Court.
The Crown says the accused entered into unauthorised and highly imprudent related party transactions which broke the trust deeds of the companies.
Martin Sweetapple, former risk manager for the companies, told the court on Tuesday that related party lending would have been a concern to the funders and trustees of the two firms and would have contravened their credit policy.
He said he became aware of related party lending to fund a luxury block of apartments in the Auckland suburb of Remuera, previously owned by sports celebrity Matthew Ridge, through archived papers.
Mr Sweetapple said he found out about the lending of more than $1 million between the two firms towards the end of 2007, which did not leave enough money to pay debenture holders from Dominion Finance's account.
He said he felt uncomfortable with what was happening and considered turning whistleblower, but decided to leave the company instead.
The trial is expected to take four weeks.