Former mayor helped property developer hide identity - court told

A former North Island mayor and lawyer allegedly helped a property developer conceal his identity, allowing the man to borrow millions of dollars from the now-failed Belgrave Finance in "forbidden related-party loans", the High Court has heard.

Hugh Edward Staples Hamilton is accused of 17 charges of theft by a person in a special relationship as well as charges of false statement by a promoter, and Companies Act charges of making a false statement to a trustee.

Hamilton, a former partner of DAC Legal who advised Belgrave until its 2008 receivership, pleaded not guilty to all the charges he faced this morning in the High Court at Auckland.

The case is being jointly prosecuted by the Serious Fraud Office and Financial Markets Authority and follows the 2008 collapse of Belgrave.

According to the Crown, Hamilton allegedly helped former property developer Raymond Schofield arrange the purchase of Belgrave in 2005 so that the man's identity and control of the company was hidden. The purpose of this was to allegedly allow Schofield to borrow from the company either directly or through other companies he controlled.

Schofield was charged alongside Belgrave directors Shane Buckley and Stephen Smith in September 2011, with the SFO alleging the defendants misrepresented how investors' money would be used. The trio were also charged by the FMA for allegedly making untrue statements in offer documents.

It was alleged that, in substance, Schofield acted as a Belgrave director.

Buckley and Smith have pleaded guilty to charges they faced and been jailed, while Schofield was granted a stay on the proceedings he faced because he was suffering from terminal cancer.

The Crown alleged this morning that Hamilton was "party to a scheme" involving the trio.

"The Crown alleges that Hamilton was party to a scheme...in which Mr Schofield would acquire Belgrave, conceal his connection to the company and funds from the investing public to make loans to Mr Schofield and entities connected to him in breach of the Belgrave Debenture Trust Deed," Crown lawyer Nick Williams told the court this morning.

"Because of Mr Hamilton's help, Mr Schofield was able to borrow large amounts of money using debenture investor's funds in what were in truth forbidden related party loans," Williams said.

This was all hidden from investors and the trustee of the failed finance company and Mr Schofield's involvement was never revealed in Belgrave's offer documents, Williams said this morning.

According to the Crown, between August 2005 and December 2007 Belgrave loaned about $18 million to companies associated with Schofield. Of this amount, it is alleged Hamilton assisted with loans of $12.6 million.

Investors were owed $20.5 million when Belgrave failed.

Hamilton's trial is set down for eight weeks before Justice John Faire.

In his early 60s, Hamilton is a former Waipukurau lawyer and served as mayor of Central Hawke's Bay for six years.

He was Waipukurau Rotary Club president, Central Rugby and Sports Club chairman and was made a Member of the New Zealand Order of Merit in the 1997 Queen's Birthday Honours.

In May last year the New Zealand Lawyers and Conveyancers Disciplinary Tribunal ordered the former lawyer be struck off the roll of barristers and solicitors.

It followed the New Zealand Law Society bringing charges of misconduct against Hamilton.

Hamilton has not held a legal practising certificate since 2011, the same year in which he was facing bankruptcy proceedings due to an unpaid debt for the purchase of a Wellington brothel.