Petricevic in line to face $1m fraud case

Rod Petricevic. Photo / Sarah Ivey

The Serious Fraud Office has investigated allegations that Bridgecorp boss Rod Petricevic used investors' money to pay $1 million to a company run by a woman he was in a personal relationship with.

A decision on whether to lay charges against Petricevic and other Bridgecorp directors is due to be made soon, although key SFO staff on the inquiry have lost their jobs and others have resigned this week.

The Weekend Herald understands the SFO inquiry centres on allegations that Petricevic authorised a number of payments without the approval of the board.

While the SFO is keeping quiet about the case until a decision is made, much of the information can be found in a Companies Office report that banned Petricevic and Rob Roest as directors last June.

The report, by the national enforcement unit, reveals Petricevic allegedly authorised a number of payments without the approval of the board, including:

* Invoices totalling $1,083,434 paid to an unregistered firm called "A Bb".

* Purchasing a $1.65 million launch called Medici.

* A personal tax bill of $576,100.

* A related-party loan of $76 million to Barcroft Holdings to benefit a Bridgecorp director.

The SFO decision on whether to lay charges against Bridgecorp will centre on legal opinions about whether these transactions were fraudulent.

The Companies Office report says Petricevic was in a personal relationship with the woman who ran "A Bb" and that he never disclosed that to the Bridgecorp board.

Investigators found that "A Bb" did little, if any, work for Bridgecorp.

SFO director Adam Feeley met senior Crown prosecutors this week and a decision on charges is expected to be made shortly.

But the SFO investigation into Bridgecorp has suffered a blow as two more key inquiry staff have resigned.

The departure of prosecutor Gareth Bostock and investigator Kim Murray means just two members of the original inquiry team remain. Three other senior staff have had their roles disestablished.

The pair told colleagues their decision to leave had nothing to do with the restructuring.

But the sweeping changes to the SFO mean other key staff on the Bridgecorp inquiry - assistant director Gib Beattie, supervising investigator David Osborn and chief prosecutor Anita Killeen - are gone.

Two other senior-investigator roles held by Ian Varley and Rhys Metcalfe have also been disestablished.

Under the new structure, SFO lawyers will work alongside investigators to prepare the file but will no longer appear in court to prosecute the cases. The Herald revealed the biggest shake-up in the 20-year history of the SFO two weeks ago.

More than 70 years of fraud investigation experience is expected to go around the same time the SFO announces whether charges will be laid against finance companies such as Bridgecorp and Blue Chip.

Suzanne Edmonds, of the Exposing Unacceptable Financial Advice lobby group, is scathing about how long it has taken for the SFO to take action - but blamed the delay on a lack of resources.

On behalf of the 15,000 Bridgecorp investors owed $460 million, she said there was "no doubt the SFO needed a shake-up" but she was disappointed that so much experience had been lost.

"For too long, the SFO has been under-resourced. By all means, restructure the SFO to strengthen it. We should be keeping those very skilled people involved."

Mr Feeley, appointed director in November, said the review began in January in response to the Government's decision to retain the SFO.

He said the need for the review had been endorsed by other law-enforcement agencies, regulators and the insolvency sector, as well as legal and accounting firms.

"That decision has required the office to reposition itself as the leading specialist law-enforcement agency in New Zealand dealing with complex financial crime.

"The outcome of the review is intended to not only strengthen its performance, but also ensure that it is structured in a manner that ensures it has access to skills to further its role in fighting financial crime."

Mr Feeley has criticised the SFO for moving slowly on finance companies.