Kurt Bayer

Kurt Bayer is an APNZ reporter based in Christchurch.

No fraud in quake rebuild contracts - SFO

File Photo / APN
File Photo / APN

A major probe into allegations of fraud and corruption involving Canterbury earthquake rebuild contracts has concluded there's been no wrongdoing, the Serious Fraud Office said today.

However, the Serious Fraud Office (SFO) continues to warn of the potential for fraud and corruption as work gears up in rebuilding the devastated city.

The investigation began last July following a complaint that raised some specific concerns in relation to repair 'scope of work' - the process of providing insurers with an estimate of likely repair or rebuild costs, prior to settling claims.

The concerns related to suspicions that estimates were being inflated and resulting in more lucrative repair contracts once claims were accepted.

Having previously highlighted concern for the potential for serious financial crime during a rebuild period, SFO wanted to minimise or eradicate any risk of fraud with early intervention.

But no evidence was identified in the case to support that suspicion, the SFO has ruled.

The case has, however, highlighted some of the difficulties facing all organisations and individuals in Christchurch, given the post-earthquake aftershocks, the on\going reclassification of land and buildings and the divergence of opinions on rebuild technical requirements, the SFO said today.

All of these factors contribute to a changing and difficult financial and commercial environment, it says.

The rebuild was an opportunity for law enforcement agencies, along with other agencies involved in the private sector, to work collaboratively to prevent any further losses to the people of Christchurch, said SFO acting chief executive Simon McArley.

"We intervened early in this case to quickly address concerns. We believe that that early intervention in itself will have had a deterrent effect," he said.

"Industry co-operation is paramount to addressing these emerging risks and SFO will continue to provide support to the construction and insurance industries to ensure positive and genuine activity surrounds investment back into the city."

In March, the SFO confirmed that it was investigating a number of alleged fraud cases.

It warned the scale of fraud could run to a billion dollars.

- APNZ

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