The Serious Fraud Office has launched an investigation into failed company South Canterbury Finance.
A statement just released by the office says it has grounds to suspect that a number of related party transactions involving SCF may have involved false statements or other fraudulent conduct.
The Government put SCF majority shareholder Allan Hubbard and his wife Jean under statutory management on June 20, with charitable trusts, Aorangi Securities, and later, Hubbard Management Funds.
On August 31 South Canterbury Finance went into receivership, triggering a $1.6 billion payout under the Government's deposit guarantee scheme.
The latest investigation is separate from the office's probe into the affairs of Aorangi Securities Limited.
Serious Fraud Office chief executive Adam Feeley said the investigation into South Canterbury Finance was launched as a result of inquiries made by its newly established Fraud Detection Unit.
"Given the scale of the SCF collapse, it would be neither feasible nor productive for SFO to carry out an investigation into all aspects of the failure.
Instead we will focus on specific transactions which we consider may have been a fraud on the investors in SCF and/or the Crown as the guarantor of investor funds."
Feeley said that despite the volume of cases which SFO had taken up in recent months, the matter was one which would have a high priority and would be progressed as quickly as possible.
"As is appropriate with a small agency, we will coordinate our efforts with the receivers of SCF, the Registrar of Companies, and the Securities Commission.
"We will also be engaging private sector insolvency and forensic accounting specialists for external assistance."
Feeley said the sharp increase in SFO investigations in recent months should be seen as a positive sign of greater law enforcement in the financial markets.
"Swift and visible investigations are a critical part of maintaining confidence in New Zealand's financial markets. Despite the challenges presented by the current volume of cases, the SFO is committed to ensuring that the public can have confidence in us as the lead law enforcement agency for financial markets fraud."
Feeley said while there were similarities in the people associated with both South Canterbury Finance and Aorangi Securities "the SCF transactions we are currently investigating have no material connection with the affairs of Aorangi Securities".
Feeley added that, subject to receiving any new information from the statutory managers, the SFO was in the closing stages of its investigation into Aorangi Securities.
- NZ HERALD ONLINE