Wait for result in South Canterbury inquiry, says English

Bill English. Photo / Sarah Ivey

Finance Minister Bill English says it's too early to say what it could mean if the Serious Fraud Office finds South Canterbury Finance guilty of misrepresenting aspects of its loan book in a bid to qualify for the deposit guarantee scheme.

On Tuesday, the SFO said it would investigate the failed finance company over whether it disclosed a number of related party loans to either investors or the Crown.

SFO chief Adam Feeley said if related party lending was undertaken without being disclosed it could be fraudulent.

If the transactions are found to be fraudulent it could mean South Canterbury should never have received coverage under the scheme and debenture investors who yesterday were expected to be paid out $1.25 billion in Government money would have missed out.

But yesterday English refused to comment on what it would mean for the Government if South Canterbury was found by the Serious Fraud Office to have gained coverage under the guarantee after misrepresenting aspects of its loan book.

"We're getting well ahead of ourselves there. There's been a few assertions made about what might or might not have happened but I think to be fair both to the investigators and to South Canterbury Finance we should let them get on with the job before we jump to conclusions."

English also ruled out a public inquiry in the face of mounting calls from the opposition and commentators saying there was no need for it.

"We've already got the Audit Office who are going to do an audit of how the Treasury handled the deposit guarantee, and you've got a law enforcement agency who are clearly digging into the details. That's two public entities who are going over South Canterbury. Anything else would get in the way of their job."

SFO boss Adam Feeley said he had spent the day working on the practical aspects of the case, putting together the team that would handle the investigation and issuing a number of notices requesting information.

He also expressed surprise at the reaction by the National Business Review after it was sent a notice requesting information.

NBR yesterday morning reported that its publisher Barry Colman was trying to set up a meeting with the SFO to discuss the information request after being threatened with jail and heavy fines if it did not provide it.

Feeley said the situation had come about because NBR reporter Matt Nippert had talked to a person that the SFO was also interested in.

The person, understood to be Peter Symes - the brother-in-law of former SCF associate Edward Sullivan and at one time the sole owner of Auckland's Hyatt Regency hotel - had disagreed with the story written and the SFO had requested the notes and tape-recordings of the interview to clarify the situation.

The notice issued was the standard statutory form, Feeley said.

Late yesterday NBR said it had provided some information to the SFO but was still seeking clarification on whether the SFO would require more.