NBR agrees to SFO document demands

National Business Review publisher Barry Colman. Photo / Dean Purcell

The National Business Review says it has decided to hand over material demanded by the Serious Fraud Office, relating to South Canterbury Finance.

The material did not compromise any of the sources of Matt Nippert, the reporter who carried out the investigation the SFO was interested in, the NBR website reported just before 11am today.

Earlier NBR said it had been given until 9am today to deliver the documents relating to the newspaper's investigation of SCF's dealing over Auckland's Hyatt Regency Hotel, and agree to an interview.

"The deadline had now come and gone. No files were handed over," the NBR website had been reporting as late as 10.30am today.

But soon after, it said it was seeking an assurance from the SFO that it would not invoke its "draconian" powers of document seizure in return for NBR's cooperation in the SCF investigation.

NBR publisher Barry Colman said legal advice given to NBR was that the legislation was so draconian that it was impossible for NBR to refuse to cooperate without risking serious penalty.

Yesterday the SFO announced it had launched an investigation into SCF over a number of related party transactions that may have involved false statements or other fraudulent conduct.

SCF was put into receivership at the end of August which resulted in a massive bailout under the Government's deposit guarantee scheme.

Debenture holders are being paid $1.25 billion today, following a $350 million payout to bondholders last month.

SFO chief executive Adam Feeley said that while related party transactions were not illegal, as such, four transactions were of particular interest.

Some people appeared to have more obviously benefited from the transaction than others, and other persons had given advice on the transaction that was possibly not always good.

The investigation was separate from the SFO's investigation into the affairs of Aorangi Securities.

Timaru financier Allan Hubbard, who became president for life of SCF, has been placed under statutory management with his wife Jean along with charitable trusts, Aorangi Securities and Hubbard Management Funds.

Mr Feeley said that subject to receiving any new information from the statutory managers, the SFO was in the closing stages of its investigation into Aorangi Securities.

Today Kerryn Downey, from receivers McGrathNicol, said announcements relating to sale advisory roles for two of SCF's equity investments -- an 80 percent shareholding in Scales Corporation, and 100 percent of Helicopters (NZ) - were likely in the next day or two.

"I'm very optimistic we'll get better than face value (for those investments)," Mr Downey told Radio New Zealand.

Significant interest had also been shown in SCF's so-called good and bad banks.

"We've been assembling this interest, really over the last six weeks. We've been very busy working with investment bankers and other advisors in assessing the capabilities and experience of the investment banks, gradually providing more information to them under confidentiality agreements.

"We expect to make an announcement with respect to that advisory role in about a week to maybe 10 days," Downey said.

A piecemeal sell-off was not the immediate focus, but if breaking up, for example the good bank, was a better option that would be done.

It was difficult to say when a sale might be made. Quite a substantial amount of vendor due diligence work had started and was likely to take a couple of months, possibly a little longer.

- NZPA