Rob Kidd is a NZME. News Service court reporter based in Auckland.

Engineer ripped off Mighty River Power for $2 million, says Crown

Mighty River Power's Karapiro hydro power station.
Mighty River Power's Karapiro hydro power station.

A former Mighty River Power engineer set up secret companies to rip the state-owned company off for more than $2.3 million, the Crown says.

Paul Kenneth Rose is on trial before the High Court at Auckland facing four charges of obtaining by deception, which allegedly took place over his eight years of employment, ending after an investigation and subsequent dismissal in December 2012.

Jane Clare Rose jointly faces two charges.

"This a fraud case about a man who used his position at a power company to enrich himself at the expense of the company. He was trusted by his employer and he abused that trust," Crown prosecutor Nick Williams said.

"His partner helped him do it."

Rose began work at MRP in 2001 and worked his way up from the role of technician to the trusted position of electrical engineer with a specialised knowledge in the maintenance of gas turbines.

His job made him responsible for buying parts and organising services and during his tenure it is alleged he secretly set up three companies that acted as a vendor to his employer.

"He would buy goods from a real company, like Siemens, add a large mark up and sell them to MRP," Mr Williams said.

"The fraud very much relied on hiding from MRP and its staff what he was up to and he went to some length to keep it from them."

Rose established two firms in the name of an ex-partner and in 2006 he met Ms Rose, who he also allegedly put at the head of a company.

Between 2010 and 2012, the pair made more than $2 million from MRP. Goods with a value of $573,000 were allegedly sold to MRP for $1.78 million.

"If they did a Companies Office search, they wouldn't see anything that connected him," Mr Williams said.

The prosecutor said Ms Rose knew what was going on and actively aided her then partner in the day-to-day operation.

Poor systems at MRP and Mr Rose's reputation made the fraud possible, Mr Williams said.

"It seems Paul Rose has a somewhat dominant personality . . . That created an atmosphere where people respected him and were sometimes afraid of him, and didn't often question what he was up to."

The court heard how at one point Mr Rose had a spending limit of $50,000 - only items or services costing more had to be signed off by a supervisor.

The trial before Justice Rebecca Edwards and a jury of seven women and five men is due to last four weeks.

How the Crown says he was caught

In July 2012, a new mechanical engineer at MRP was scanning a list of purchases.

His eye was drawn to the listing of a normally-reliable item that was used to measure vibration in machinery.

The staffer was more surprised when he saw the replacement product had been sourced from nearby.

"He found it unusual there was an Auckland-based company that made a business out of selling such a specific part," Mr Williams said.

After executing "a bit of his own detective work", the man found contact details for the company: a woman named Jane based in Howick.

Cross-referencing with Rose's Facebook profile, he saw the defendant was engaged to a woman by the same name and lived in east Auckland.

He then called the woman and asked for Rose.

She duly passed on his cellphone number and the employee went to bosses with his suspicions the following day.

Mr Rose was suspended, a specialist investigation team was brought in to look at the books, and he was dismissed nine days later.

- NZ Herald

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