26 Mar 2014

Resignation after lack of answers

9:13 pm on 26 March 2014

A director of South Canterbury Finance's (SCF) parent company resigned after failing to get straight answers from the late Allan Hubbard, the High Court at Timaru has been told.

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

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

Former South Canterbury Finance chief executive Lachie McLeod and former directors Edward Sullivan and Robert White are appearing in the High Court at Timaru in the country's biggest-ever fraud trial.

The Serious Fraud Office brought the charges, including theft by a person in a special relationship, false statements by a promoter, obtaining by deception and false accounting. All up the men face 18 fraud charges relating to the $1.6 billion collapse of SCF in 2010.

They also include failing to declare related-party lending to various companies, one of which was SCF parent company Southbury Group.

On Wednesday, Southbury Group director Andrew Borland said he repeatedly asked SCF owner Mr Hubbard for an explanation of why another one of his companies, Aorangi Securities, was lending money to Southbury. However, he never received one.

"I got increasingly concerned about the discrepancy and just his avoidance of a straight answer," Mr Borland told the court.

He said he was shocked at other transactions Southbury was involved in without his knowledge and which were carried out at the behest of Mr Hubbard, and eventually resigned.