Qantas New Zealand executive accepts blame

By DANIEL RIORDAN

All but one of Qantas New Zealand's seven directors are off the hook after the failed airline's chief executive, Kevin Doddrell, fell on his sword yesterday.

The six directors include some of the country's biggest business names.

Mr Doddrell, also a director, pleaded guilty to three charges of failing to file financial accounts on time, and could be fined up to $300,000 under the Financial Reporting Act 1993.

His case, being heard in the Auckland District Court, has been adjourned until Tuesday.

The Companies Office dropped the same charges against Ken Cowley, Fred Watson and David Belcher, after previously abandoning its cases against Trevor Farmer, David Skeggs and Rob Campbell.

Mr Cowley, Mr Watson and Mr Belcher did not appear in court yesterday, but each sent in a high-powered legal team - including former Air New Zealand chairman Jim Farmer, QC, representing Mr Belcher, the merchant banker who stitched together the deal to buy the airline.

The airline's collapse in April last year left creditors about $136 million out of pocket. The liquidators are still sifting through the rubble but do not expect to return unsecured creditors more than 20c in the dollar.

The Crown accepted that the failure to file the accounts for the June 2000 year by the statutory deadline of December 31 had not contributed to the airline's collapse almost five months later.

Crown counsel Hugh Rennie, QC, argued that there was no substantive reason the accounts could not have been completed in time, and said there had clearly been deficiencies in the company's corporate governance.



Companies Office enforcement unit manager Shane Keohane said afterwards that by pleading guilty, Mr Doddrell had accepted the directors' failure, and the public interest would not be served by trying to prosecute the other three directors.

Although Mr Rennie asked for Mr Doddrell to be fined $25,000, Judge Fred McElrea said it was not appropriate for counsel to suggest figures, given the prosecution was being brought under a relatively untested piece of legislation.

Mr Doddrell's lawyer, Paul Davison QC, told the court his client found himself in a "modest" financial position, but with enough money in the bank to meet a fine similar to the amount proposed by the Crown.

Mr Doddrell sat through almost three hours in court, only to have Judge McElrea decide it was getting too late to conclude matters.

Asked outside court if his fellow directors would be chipping in for any fine he had to pay, Mr Doddrell shook his head and refused to answer further questions.

nzherald.co.nz/aviation

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