SFO restructure preposterous, says first chief

The founding director of the Serious Fraud Office says a planned restructuring to remove five senior staff will "rip out the heart" of the white-collar crime agency.

Charles Sturt, who was director between 1990 and 1997, said it was "simply preposterous" that more than 70 years of fraud investigation experience was expected to leave.

The Weekend Herald understands six senior roles will be disestablished in the draft review, including that of assistant director Gib Beattie.

Current director Adam Feeley said no decisions had been made but the need for a review had been endorsed by other law-enforcement agencies, regulators and the insolvency sector.

He said the review began in January in response to the Government's decision to retain the SFO.

"That decision has required the office to reposition itself as the leading specialist law-enforcement agency in New Zealand dealing with complex financial crime.

"The outcome of the review is intended to not only strengthen its performance, but also ensure that it is structured in a manner that ensures it has access to skills to further its role in fighting financial crime."

Mr Feeley has publicly criticised the SFO for not moving more quickly than it did to investigate the collapse of finance companies which began in mid-2007.

But Mr Sturt questioned the need to restructure the SFO and pointed to the 90 per cent conviction rate for prosecutions.

He said any delays in finance company investigations should be blamed on the previous Labour Government which planned to abolish the SFO, adding that the SFO was in limbo between September 2007 and October 2008 and staff became demoralised.

During that time, director David Bradshaw resigned and was followed by assistant director Gus Andree Wiltens and other senior staff.

With the axe hovering over the SFO, Mr Sturt said the third director Grant Liddell kept "things ticking over", but any failings in investigating finance company collapses stemmed from the uncertainty of 2007 and 2008.

To restructure six top roles - including Mr Beattie, chief prosecutor Anita Killeen and senior investigators David Osborn, Rhys Metcalfe and Ian Varley - would "rip out the heart" of the SFO, said Mr Sturt.

"This is a highly complex and specialised area of criminal investigation," he said. "The SFO is not a commercial firm, or not just another Government department, or accounting or legal firm. It is unique and I'm not sure where they are going to replace this experience."

Mr Bradshaw declined to comment.

In January, Mr Feeley told the Herald he had set a deadline of March 31 to decide if charges would be laid after investigations into finance company activities.

Although that deadline had to be extended, he described the length of the finance company investigations as a historical legacy he did not wish to repeat.