New Zealand: How Crooks’ Buddies at WhaleOil Bounced Out the Chief of the Serious Fraud Office, and More

It was a particularly lively weekend in , already in ferment as a result of the facts and claims documented in Nicky Hager’s new about dirty tricks in New Zealand politics. Everyone’s paying a great deal of attention to the workings of the political/media sausage machine and the leaks are flowing.

It turns out not to be a machine, as such, more a tangled writhing heap of politicians on the make, spin merchants on commission, CEOs of massively bust companies, journalists looking for copy, chattering policemen, and bloggers on a sort of nihilistic spree. As you might expect, the resulting display is not at all pretty, or simple. Still, the same sort of thing goes on everywhere else too, and normally one doesn’t get to inspect the workings. One should take the opportunity to look and learn. This will be a brisk, longish walk through a tremendous mess, dear reader. I’ll do my best to get the story straight and highlight my favourite bits.

There was another leak on Friday. That leak the already-vulnerable scalp of Justice Minister Judith Collins:

Prime Minister John Key has tried to distance himself from claims Mark Hotchin was paying bloggers to undermine the Serious Fraud Office, saying he does not know about the arrangement and it is not a matter for the National Party.

Former Justice Minister Judith Collins resigned as minister yesterday after Mr Key’s office was given an email from Whaleoil blogger Cam Slater in which he talked about sharing information on former SFO director Adam Feeley with Ms Collins.

At the time, the SFO was investigating Mr Hotchin’s company Hanover.

Mr Key is expected to announce further details on an inquiry into Ms Collins’ involvement after Cabinet meets tomorrow. She has denied the claims made by Mr Slater in the email.

Hanover was a GFC-era bust, a big one, by New Zealand standards, at any rate: NZD500million, or so, with 10,000- private investors taking losses. The SFO have packed in their investigation without bringing charges, but FMA are bringing a civil case to court , maybe. I must therefore emphasize that the “crook” in my headline is not Mark Hotchin: his proper designation is still to be established.

Yet more newly-leaked emails in two pieces by Matt Nippert, published on Sunday, and , add some details to the Collins resignation story. Nippert’s back story identifies the source of the Friday leak that felled Justice Minister Collins:

Justice Minister Judith Collins’ resignation was sparked by a Fairfax investigation into a smear campaign by bloggers apparently backed by controversial financier Mark Hotchin.

Knowing Fairfax was investigating the hacked emails, it is believed Odgers (known by the blog name Cactus Kate) went through her own emails and found some that could be seen as implicating Collins. This correspondence then found its way to a Beehive staffer on Friday.

An aside: Ms Odgers is the baleful blogger, NZ Herald newspaper columnist, wannabe M.P.,  diminutive , tax lawyer, and serial major fraud bystander who appeared in a leading role in a recent NC post about apparent Russian mafia connections in New Zealand. She has since left her job in Hong Kong, “by mutual consent”. That departure might sound like a blogging coup worthy of Odgers herself, but in fact both her former company and Ms Odgers should be quite impervious to any embarrassment arising from our blog post; they’ve heard most of it before. One suspects the job change is motivated instead by the multiple massive breaches of offshore lawyers’ omertà that Odgers is seen to perpetrate in the Hager book.

From Nippert’s weekend email cache it appears that the smear campaign against the SFO really was paid for by SFO investigation subject Hotchin. Here’s an email dated 28 August 2011, just before the smear campaign started. Click the picture if it’s hard to read.

no money

Since a picture is worth a thousand words, and Twitter, in the form of one @DebsHancock, is , here’s one reasonable pictorial summary of how the undermining of the SFO worked; if, note well, it was really happening at all, which ex-Minister Collins, for one, . BwUdhxGCAAAYf00

There isn’t anything that’s totally unevidenced in this picture: even the “Tipline” between Collins and Slater is known to exist, because Collins has been :

Justice Minister Judith Collins is refusing to apologise to the public servant who received death threats….

Mr Pleasants received death threats after Ms Collins passed his details to Slater, who blogged on him.

Equipped with the big picture, let’s now go back to Odgers’ , and see what we can squeeze out of it that the NZ media may have missed, or, indeed, dear reader, might prefer you to miss. First, let’s establish the dramatis personae from the header and summary:

From Cam Slater

To mark [redacted] Carrick

Ok guys here is an update on the state of play on Adam Feeley.

Today is the 4th straight day of headlines and additional revelations about Adam Feeley

Mark is Mark Hotchin of Hanover, under SFO investigation; [redacted] is Cathy Odgers; Carrick is Carrick Graham, the PR Consultant in the Twitter diagram; Adam Feeley is the soon-to-be-ex-head of the Serious Fraud Office.

Next, there’s the “smear campaign“.

I am maintaining daily communications with Jared Savage at the Herald and he is passing information directly to me that the Herald can’t run and so are ing me to run on the blog. in the meantime I also have additional information flowing in via my tipline.

Note that this ‘tipline’ isn’t necessarily an info from Collins, specifically, but just any old info source that Slater can trade with.

That information will be drip fed into the media or via my blog.

Herald articles

Fran O’Sullivan:

Editorial:

Cathy can outline her with Fran O’Sullivan separately. Basically though the Herald and other media are now picking up our lines that this situation is like “Caesar’s Wife” where the SFO must be beyond reproach. If he nicked a bottle of wine what else has he nicked or hidden from receivers and liquidators?

So far the Herald has been running NBR to publish on Friday. Cathy will be chatting with Jock Anderson and I will cover Matt Nippert.

Our (Cathy’s) nickname for Feeley (Five Fingers Feeley) has stuck. journalists ringing me actually use to describe Feeley now in phone conversations.

Tellingly, the observant Slater relishes both the capture implied by the shared vocabulary and the contempt it indicates for the intended victim.

Now, four articles don’t make much of a smear campaign. Eighteen, in total, that would be a smear campaign. Here, then, are the other fourteen that I found, the work of the NZ Herald (and affiliates) and the NBR.

Oct 6, 2011 Jared Savage, NZ Herald

  Oct 6, 2011 Jock Anderson, NBR

Oct 7, 2011 Deborah Hill Cone, NZ Herald

Oct 8, 2011 Jared Savage, NZ Herald

Oct 14, 2011 Anna Leask, NZ Herald

Oct 14, 2011 Matt Nippert, NBR

Oct 15, 2011 <no byline>, NZ Herald

Oct 17, 2011 <no byline>, NZ Herald

Oct 18, 2011 Reon Suddaby, Wanganui Chronicle, an NZ Herald affiliate

Oct 18, 2011 Claire Trevett, NZ Herald

Oct 19, 2011 Fran O’Sullivan, NZ Herald

Oct 19, 2011 Matt Nippert, NBR.

Oct 20, 2011 Claire Trevett, NZ Herald

  Oct 20, 2011 <no byline>, Bay Of Plenty Times (an NZ Herald affiliate)

The NBR takes a (relatively) brief sniff at the story. Matt Nippert is perhaps suspicious of a mysteriously superfast Official Information Act turnaround that enables him to publish Feeley’s humiliating apology letter to Collins just a few days after the poor guy wrote it. It happens that Official Information Act requests are processed by Collins’ office.

Underlying the stream of NBR and NZ Herald articles there are just two bits of police gossip.

The first of those is the of a bottle of champagne consumed by an SFO team celebrating the laying of charges against a very nasty big time fraudster, Rod Petricevic. The champagne is a trophy: it was found abandoned in the offices of Petricevic’s company, Bridgecorp, which, like Hanover, took ~NZD500Mn of small investors’ savings with it when it went bust.

The second is the of a booby prize at an office party:

The head of the Serious Fraud Office gave copies of Allan Hubbard’s biography as “booby” prizes at a staff Christmas party while the former Rich Lister was under investigation.

Adam Feeley, the SFO chief executive, gave handcrafted wooden statues to winners at a joke prize-giving last December and paperback editions of “Allan Hubbard: A Man Out of Time” to the runners-up.

At the time, Mr Hubbard’s South Canterbury Finance was in statutory management after a $1.8 billion Government bailout and the Timaru accountant was being investigated by the SFO.

Six months after the Christmas party, the SFO laid 50 charges against the 83-year-old, who denied any wrongdoing.

Last month, Mr Hubbard was killed near Oamaru in a head-on car crash on State Highway 1 that also seriously injured his wife, Jean, 82.

The NZ Herald’s angle is all based on these two office party stories. Somehow the NZ Herald journos get 14 (fourteen) separate headlines from that unpromising material: that’s real professionalism, in a certain highly technical sense.

The NZ Herald sequence is rounded off with some concern trolling:

Nov 17, 2011 <no byline>, NZ Herald

And the denouement comes a little over six months later, a decent interval:

  Jul 31, 2012 Jock Anderson, NBR

The Anderson piece mentions that Feeley’s departure was predicted in a leak from “well-placed legal and political insiders”, whoever they are. Feeley left two years before his contract was up:

Mr Feeley, who has found another job as ceo of Queenstown and Lakes district council, is said to have been under pressure to quit after some well-publicised lapses of judgment.

Maybe the NBR can faintly smell a “well-publicised” rat. It does look as if those heavily recycled office party stories did the trick for Odgers, Slater and Graham.

After Friday’s revelations about the underlying corruption, or collusion, behind this deeply unpleasant story, Jared Savage of the NZ Herald :

In total, I wrote six stories about the Feeley/champagne issue and Slater was not the source for any of them. I didn’t know that our conversations about Feeley were being shared with others, like PR man Carrick Graham – and that was naive of me to think otherwise.

Journalists talk to all sorts of people about all sorts of stories, much of which is nothing more than rumour or innuendo. Our job is to sort the wheat from the chaff and publish what is accurate, fair and true.

…as does Fran O’Sullivan, in the same piece:

It was – and remains – my strong view that the issues exposed in Savage’s story exposed poor judgment by former SFO boss Adam Feeley and compromised his office.

and the Editor weighs in too:

Two big stories the NZ Herald broke regarding Adam Feeley in 2011 were independent of Whale Oil, and sourced from other s. It was good journalism, and in the public interest.

Nevertheless, some might still feel that this looks like the media overplaying Mr Feeley’s vindictive $70 bottle of bubbly and his annoying booby prize book. Those jejune vignettes, passed on by gossiping policemen, are, as far as I can see, the “big stories” the NZ Herald broke.

According to the NZ Herald, Cameron Slater had no role whatsoever in the sourcing of their stories. Arguably, too, his email is just hyping his own influence, to his client Hotchin’s PR man. Nevertheless, an anti-Feeley media campaign, fed by the very people named in his email, did actually occur, right before, during and after his email was sent, and one way and another, the stories all come from police sources inside and outside the SFO. What an astonishing coincidence that is. Does Cameron Slater have police s in his tipline, perchance?

So much for the smear campaign and the Friday email leak. One of Nippert’s weekend stories also shows Graham apparently suggesting that  a Hanover witness needs to be :

Another email appears to discuss plans to undermine the credibility of a potential witness in the Hanover investigation, property developer Tony Gapes.

Graham wrote in one email: “Just off ph to MH . . . Seems our friend Tony Gapes is thinking he’s a bit of a star witness for the SFO against our man.”

He added that Gapes “should have some sunlight shone on him. Enough to raise questions of credibility with the SFO”.

That email went out on the 16th August 2012. By the 23rd August, we have  spectacular coincidence:

The Serious Fraud Office is investigating the Wellington Tenths Trust over possibly unlawful payments and transactions.

SFO boss Adam Feeley told The Dominion Post yesterday that the agency had received a complaint about the trust.

“We are investigating transactions connected with the Tenths Trust and whether there may have been any payments or transactions related to them which were unlawful,” he said.

The investigation comes after Tenths Trust chairman Sir Ngatata Love stood down from all his positions representing Maori – including chairing the Port Nicholson Block Settlement Trust – pending the outcome of an inquiry into a $1.02 million payment into an account he held with partner Lorraine Skiffington.

Other senior members of the Tenths Trust community said they were staggered to learn of Ms Skiffington’s consultancy deal.

A later deal, signed with another Skiffington entity – Strategic Directionz – included the provision of payments of $62,500 GST per month for ongoing work.

When these payments began to slip, Ms Skiffington warned that there would be no work done on other proposed Redwood Group projects in Petone, Greta Pt and the proposed Kate Sheppard Plaza, until the matter was resolved.

Redwood Group founder Tony Gapes said payments to Ms Skiffington went through a joint venture bank account.

On 10th Sept 2012, in another coincidence, Slater at Whaleoil with another Skiffington/Gapes story. SFO were still struggling with their Tenths Trust investigation in , under Feeley’s successor; I couldn’t find a more recent update. It does look as if Graham and Slater induced the SFO to start an investigation that hampered another SFO investigation: neat. The SFO must now feel it’s a pity they couldn’t join the dots between the Hanover investigation, Tony Gapes, and the Tenth Trust tip-off. Some journalists reporting this saga will know that feeling. The trouble is, sometimes the dots are quite artfully hidden.

There’s another unfortunate NZ Herald connection too; that same Matt Nippert weekend story has the key email. By mid April 2012, the Slater/Odgers/Graham team switch focus from the SFO (sufficiently knocked off balance, by then, I suppose) to the FMA. strategy mh call 1 strategy mh call 2

It is well-confirmed that by then Cathy Odgers does indeed own the NZ Herald, and wants to fuck with FMA, for, the very same day as the above email exchange, appears in the NZ Herald under Odgers’ byline. As you can see from the very recent update in that piece, the NZ Herald is now rightly embarrassed about carrying this piece of hack work, paid for, one assumes, by Hotchin, also the subject of an FMA investigation:

Herald editors knew nothing at the time of publication of any campaign to disparage the FMA or SFO or their leaders.

Evidently by April 2012 the Herald had forgotten their 15 (fifteen) late-2011 pieces knocking the SFO. It seems appropriate to provide a reminder.

And now we get around to the crook in my headline. One of the Herald pieces listed in the Friday email that forced out Justice Minister Collins is :

Rod Petricevic says it was “vindictive” of Serious Fraud Office boss Adam Feeley to crack open a bottle of Bridgecorp’s bubbles to celebrate criminal charges against him.

“I’m surprised and I’m really quite appalled to be quite honest. I wouldn’t have thought this situation is one for celebration,” Petricevic said last night.

He said the SFO was celebrating the “misfortune” of people being charged and it was an upsetting time for him, his co-accused Rob Roest and their families.

Presumably that was not as upsetting as the ,

Convicted former Bridgecorp director Rod Petricevic has been jailed for 6 and a half years.

This month Petricevic was convicted on 18 Crimes, Companies and Securities Act charges of including misleading statements in an investment prospectus, with the former charges carrying a maximum sentence of 10 years imprisonment.

Justice Geoffrey Venning said he did not believe Petricevic showed true remorse for his actions in the collapse of Bridgecorp in which 14,500 investors lost $490 million.

“You have said you are remorseful but also maintain your innocence.

“You may be sorry investors lost their money but that is not true remorse – you apparently still consider you did nothing wrong.”

Crown prosecutor Brian Dickey earlier said Petricevic’s offending was “cynical”.

As it happens, Petricevic’s trial started on the 25th October 2011, , and he might well have fancied a final, remorseless, vengeful pop at the SFO. He duly appears in the Slater email that summarises the knocking stories to date. So what I’d like to know is: if Hotchins was paying Odgers and Slater to knock the SFO, were they also undertaking the same service for the purportedly penniless Petricevic? That would only be true friendship, if it was free of charge, I suppose. Perhaps, though, my headline is altogether wrong, and the fall of Feeley is just a happy vengeful fluke for Petricevic. There’s an obvious follow-up: a quick look at coverage of the Petricevic case, by bloggers and newspapers. Is there any sign of a campaign there, too?

To sum up, finally: bamboozled by a PR man and two well-connected bloggers in the pay of a man under investigation by the SFO, the media (especially the NZ Herald) played a major part in the sidelining of the head of the SFO, on a trivial pretext. Somewhere in the background, there is connivance from the police and allegedly the Justice Minister too. One question awaits a truly satisfactory answer: why on earth would Collins take part in a conspiracy like this (if she did)?

A penultimate gentle nudge at the media: the SFO head was above all an effective public servant who ran an investigation that secured a number of convictions in Petricevic’s NZD490Mn investment fraud, Bridgecorp. In my neck of the woods, successful fraud prosecutions on that scale are as rare as rocking horse droppings. Maybe New Zealand can afford to throw away public servants who can pull off that sort of feat, but I doubt it. In context, one can only be impressed, though not necessarily in a good way, by Fran O’Sullivan’s stalwart conviction that gossip about a tasteless booby prize at an office party, or a psychopath’s whine about a bottle of bubbly at another office party, matter more, when assessing an SFO chief, than a good prosecution record:

“It was – and remains – my strong view that the issues exposed in Savage’s story exposed poor judgment by former SFO boss Adam Feeley and compromised his office.”

Others might contend instead that the background to the Judith Collins resignations exposes poor judgment by the NZ Herald editorial staff and compromises their newspaper. Tellingly, O’Sullivan latest comment still reproduces Slater’s line of three years ago:

Basically though the Herald and other media are now picking up our lines that this situation is like “Caesar’s Wife” where the SFO must be beyond reproach.

This is proverbial humbug. In fact, “the perfect is the enemy of the good”, as we see in the case of Feeley.

This distant blogger, who gets all his stories second hand from public sources, or pre-checked by proper journalists, and can blog when he feels like it, not when print deadlines dictate, has some obvious observations, from his comparatively very easy berth, and with the benefit of a whole lot of hindsight.

The NZ media need to get Slater’s humbug out of their heads, straight away, and in future, pay closer attention to who’s putting the chum in the water (Odgers, for instance, right now) and who benefits (John Key, rid of Collins, gets a new lease of life, for instance, right now).

Consider also: at the present, ex-Justice Minister Collins (blown up by Odgers on Friday) and Prime Minister Key (now subject of a Privacy Commissioner , by Collins’s buddy Cameron Slater, that went in after the Prime Minster’s office published the Odgers email) look exactly like proxies in a falling out between the two bloggers, announced by Odgers two weeks ago, on the KiwiBlog (). That might well affect the development of the story from here.

It’s an undignified and erratic way to organise the affairs of New Zealand, this leakery, and it’s already caused institutional damage: see the SFO story; with the Fourth Estate led by the nose, to boot. It needs to stop. Otherwise, Hager will write more or less the same book again, and the media will be writing more or less the same stories again, come the next election. Most can agree that this sort of thing really should not be a recurring bug, never mind an acknowledged full-on feature, of public life in New Zealand. Who could make it stop? Someone who thinks hard and dispassionately about sources, evidence and motives, and can get heard above the hubbub, would be a start. The electorate, if it cares enough, is more likely to show its disapproval by staying away; that won’t improve anything, far from it.

Meanwhile, the name of serial major fraud bystander and recent chum-dumper Cathy Odgers crops up again in Slater’s discussion of yet another fraud, Bridgecorp, and very close indeed to an attempt to manipulate the outcome of another fraud investigation, into Hanover Finance. In the case of Hanover no fraud was found: the investigation hit a brick wall, seemingly because the investigators just couldn’t trace the money flows. Odgers is beginning to have quite a rum-looking portfolio there, whatever that implies; I do find it intriguing, I must admit.

Last minute update: Nippert’s latest TV appearance has some illuminating  on his corner of the sausage machine, and we are promised more from Fran O’Sullivan in the NZ Herald on NZ’s Wednesday.

Belated disclosure 3rd Sept, after an email scan: it took “Dirty Politics” to wake me up about Odgers, too.

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14 comments

  1. Lambert Strether

    So NZ isn’t all hobbits and sheep? They really kicked out an effective SFO head because of some bubbly and a book? What’s wrong with these people?

    Also, I love the diagram; it’s brilliant. Puts the whole vile system down on something post-card sized I can get my head around.

    1. ChrisPacific

      Hey, at least we have a Serious Fraud Office! In the US it would be called the Financial Innovation Commission.

  2. Gaffer Galtiere

    No, New Zealand is mostly hobbits and sheep with an ethos of minding your own business and not doing your neighbour down even if he gives you the chance. Unfortunately even the clearest and cleanest of pools has its share of scum, which will always rise to the surface.

    Prime Minister John Key worked for Merril Lynch, becoming head of foreign exchange, so what chance had mere hobbits and sheep of avoiding a fleecing?

    1. downunderer

      Quite true, Gaffer, and then some. In addition to your points, and speaking of course in generalities, in this small country everyone knows everyone else, or is somehow related by association if not by blood. We all have our vulnerabilities. Sooner or later, everyone’s turn comes around to be the one protected – or outed – or falsely and expensively accused.

      And NZ defamation law helps keep things quiet. Someone with a too-big mouth can be held legally liable for damaging another’s reputation, even if all revelations are true. As best this non-lawyer understands it, the additional requirement beyond truthfulness is having a “duty to disclose”. As a reporter might, but not a neighbour who notices something peculiar, or a good net-sleuth who can add 2 + 2.

      Another serious problem with defamation law is having the cash available to pay for a very expensive legal case, whichever end of it you’re on. As a one-time victim of published defamation that was easily proven false based on public records, I discovered that the court-ordered penalties for such are generally a fraction of the legal costs to both sides, making this law a tool best suited for use by the wealthy. Such as those who are in positions of power, or being attacked by enforcers or whistleblowers.

      So networks of bad actors and actions like the present one are slow to be uncovered. I would not be surprised to see revelations with far greater global significance emerge from this tangle that Richard has uncovered, perhaps even some that would make headlines in America, but it will probably be investigators not resident in New Zealand who do the uncovering.

  3. ambrit

    This reminded me right away of Hearsts famous “Cuban Adventure.”
    Couldn’t someone entice this Key fellow down to the Maori lands and challenge him to trial by combat? (Do the Maori have that any more? {It would be public spirited of them.})

  4. Jeeves Ponzi

    We all know there are companies like Jeeves in Liechenstein, who inevitably launder or help legislate to launder. And we all know that they need lawyer’s like the boyish Mz Odgers to do their ‘legal’ work for them. Where Mz Odgers has strayed from the fold is indeed by transgressing the offshore omerta, by bringing to attention the unnamed spooks in the international shadows – the Chop-chops and the Russians. And she has done so with the usual unconcealed contempt she has exhibited for so many others on so many occasions in her blogs. Now the real powers that be have decided she’s just not playing cricket old boy- at least not according to the Club rules.
    Perhaps Mz Odgers genuinely believes she has done well in life on the strength of her own talents and effort- but now realises she is as much a pawn to circumstance as the poor workers, beneficiaries and solo mums she has so readily consigned to the scrapheap of human capital. In fact it now seems she was intstrumental in putting as many of them there as she could. I wish I could sympathise, but it is exactly individuals like this, who are drawn blindly to what they think constitutes success, who are the real fuel which drives the evil that is unsatiable greed. Whether she feels she has worked within the law or not (and what on earth constitutes ‘law’ in Liechenstein, Grenadines,the Cook island or elsewhere who can say?) she nevertheless is part of a caste who have misery on their hands as sure as they stole the money themselves..
    Good people make good decisions every day about who they will lie down with.
    Legality is not morality-“I’m having an affair with a married man- but I’m not cheating- he is” (Cactus Kate blog ).
    Her and her NZ band of acolytes “The Feral Five” of WhoreOil Slater, Carrick ‘the tobbacconist’ Graham, Simon ‘Tea Party’ Lusk, and Aaron ‘Rymans’ Bathnagar are beginning to learn that when you play Big Boys games- Big Boys’ Rules apply.

  5. sebmojo

    Good post, thanks. FYI it’s the Official Information Act, though Open Information Act isn’t too bad a description of its function.

  6. micron

    Great summary of the situation.
    What I want to know is what was Cameron Slater doing out of NZ as the story unfolded?

    The Sunday newspapers said he was “in Israel at the invitation of the Israeli government.” Not that he doesn’t have the right to be there, but that sounds sort of suspicious and sinister, given the antics he has been up to.

    The only propaganda interest that Israel could have in NZ that I could imagine could be around identity theft, using NZ passports. On the day of the devastating Christchurch earthquake, there was apparently a group of young Israeli backpackers whose van was hit by a collapsing building façade, so that one died. Their group was evacuated and quickly flown out of NZ, apparently under the orders of Prime Minister Key.

    The story that I remember said the Israeli Ambassador (not resident in NZ) immediately flew in from Canberra to expedite their departure.

    This was all reported in the newspapers at the time. Air photos were published of their parked van immediately after the quake, and then a few days later. Though it was in an area that was completely sealed off by NZ Civil Defence, their van had been removed from under a pile of rubble.

    The speculation is that they were a computer hacker team, sent to capture a lot of plausible NZ identities from a databank, for phony Mossad passports. This was all officially denied, the opposition chose not to pursue it, and the matter disappeared from the media, especially with the coverage of the devastation of the quake at the same time.

    So did Slater’s presence in Israel at the invitation of the Israeli government have anything to do with that? Or was it a more benign reason?

  7. Sean McAfee

    The coincidences run further.
    Carrick Graham is the son of Doug Graham, former Minister of Justice, who in his post-political career, was a director of Lombard Finance, yet another NZ finance company that went broke (to the tune of NZ$127m)
    In February 2012, Doug Graham was convicted, along with fellow former Justice Minister Bill Jeffries and two other men, of breaching the Securities Act by making untrue statements to investors in his capacity as a director of Lombard Finance

    So during the same period that young Carrick is orchestrating secret blog and media smear campaigns against the same regulators (SFO’s Adam Feeley and FMA’s Sean Hughes) who are responsible for charging his father. Is this simply a case of utu (personal revenge)?

    Who else was Carrick Graham being paid by (other than Hanover’s Mark Hotchin)?
    Rod Petricevic or other Bridgecorp directors? His father or other Lombard directors?

    Or was Carrick Graham’s smear campaign against regulators on general behalf of all NZ company directors? Certainly, a cloud of fear descended over directors looking at the number of convictions (at least 32) of directors of failed finance companies.

    For at this same time, new security laws were being drafted up removing key director liabilities and the transfer of any legal actions from criminal to civil courts

    So under the subsequent Financial Conduct Act 2014 none of the Lombard Directors –including Doug Graham- would likely to have faced conviction as “strict liability” for a misleading prospectus has been removed. In addition the FMA will also have to take civil rather criminal prosecution to try and recover lost monies.

    Finally it is interesting to note that in appealing Doug Graham’s conviction and sentence, his lawyer argued that because the new Financial Conduct Act removed director criminality, his sentence under the previous Securities Act would have no deterrence and therefore should be reduced

    Meanwhile Messers Feeley and Hughes have left their former positions.

    For the very sorry list of finance company bankruptcies see here

    1. Richard Smith

      Thanks for this. Not sure where Nippert, Savage, Anderson are going to take their investigations next. I suspect there will be a bit left for me to dig into though. BTW the new offence (July 2014) in the Companies Act (“reckless trading”) may mitigate the toning down in the Financial Conduct Act but so far it’s untried.

  8. Z

    Slater now busy deleting posts. No worries, mate. The posts are still available through the internet archive, and the boffins at the NZ National Archive + others.

  9. SPON

    As one of many non-NZ investors who have been trapped in a cleverly constructed scheme set up by major NZ players, I am concerned that the Corruption Index still lists NZ as being seen as one of the least corrupt countries in the world. It is this benign reputation that puts us at risk and it is undeserved. We despair of any way out since we have been dealing with some of those you mentioned in your excellent post. Our lives have been ruined. Many were near retirement with no way of recovering. These are greedy people with no conscience and the world needs to be warned.

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