The trial, in the High Court at Auckland, involves Dominion Finance director Robert Barry Whale, former chief executive Paul William Cropp and an accused with name suppression.
The trio have pleaded not guilty to theft by a person with a special relationship.
In the case brought by the Serious Fraud Office, the accused allegedly entered into a number of related-party transactions and knowingly breached requirements of the debenture trust deeds of Dominion Finance and sister company North South Finance.
In the witness box yesterday, Sweetapple told of instances where $3 million had gone from North South's bank account to Dominion's when funds were dwindling over the 2007-08 Christmas period.
"On one particular day over $1 million was paid out [to debenture holders] and it left very little in Dominion Finance's bank account," Sweetapple said.
Another $1 million was due to be paid out the next day and Sweetapple said there wasn't enough money in the account. He noticed the next day that "perhaps $3 million" had come over from North South's account to Dominion's.
According to the Crown, $11.9 million was transferred from North South to Dominion over time "under the auspices of security-sharing agreements".
In exchange for the funds, North South through the agreements acquired an interest in already defaulting or problem loans, the Crown argues.
Around the time of one of these security sharing arrangements in early 2008, said Sweetapple, someone from his office told him Dominion was "funding its bad loans" through North South Finance.
Sweetapple said he had considered turning whistleblower.
"I contemplated whether I should speak to some external party about what was going on there, be it the trustee, I don't know. In other words, should I be a whistleblower?" he told the court.
The risk manager said he had made up his mind to leave the company. He moved to ASB Bank in May 2008, just months before Dominion Finance went into receivership.
During his testimony, Sweetapple said that in April 2008 Dominion Finance's liquidity position was touch and go.
When Crown prosecutor Brian Dickey asked the witness about the picture of the company's liquidity, he replied: "Well, the funds were dwindling and they were heavily reliant on some exposures that should have been repaid, matured loans, expired loans, that should have been paid that weren't being paid as they fell due."
Earlier, the Crown witness said that he didn't believe issues with related-party loans were raised with the credit committee, which was the body responsible for approving or declining the loans that Dominion or North South made.
In response to a question from Dickey he said: "It should have been a concern but I don't ever remember it being raised."
