Winebox decision a disgrace says Peters

The Serious Fraud Office has decided not to prosecute anyone linked to the transaction at the centre of the Winebox allegations of tax fraud because of difficulties in establishing criminal intent.

But the decision by SFO head David Bradshaw was slated yesterday by NZ First leader Winston Peters.

Mr Peters vowed to pursue the matter, which he first raised in Parliament after being given a winebox of documents in 1992.

A three-year commission of inquiry headed by former Chief Justice Sir Ronald Davison cleared European Pacific of tax fraud. But the Appeal Court ruled last August that Sir Ronald had incorrectly applied tax law.

That led to the SFO's again probing the Winebox, culminating in yesterday's decision.

Mr Peters labelled the ruling a "total disgrace" and said he was consulting his lawyers over options for further action.

"I can guarantee this is not the last you have heard of this by a long shot.

"If these people can't get a prosecution then frankly they should be removed from the job.

"For [Mr Bradshaw] to recite Davison as an authority when he was turned over by a full, unanimous panel of the Appeal Court and panel of the High Court is absolute bunkum. There is blood all over the floor, all over their hands, yet they appear to want a signed confession before they will act."

Mr Bradshaw, explaining his decision, referred to New Zealanders' "repugnance" at the Magnum transaction put together in the 1980s by European Pacific, then owned by Fay, Richwhite, the BNZ and Brierley Investments. They allegedly saved $2m in tax.

But Mr Bradshaw said that after exhaustive consideration of all of the evidence, he had decided a prosecution "would likely fail in its attempt to establish the requisite criminal intent."

He said his view was shared by the Auckland Crown Solicitor, Simon Moore, and a senior member of the SFO panel of prosecutors. "I am aware that there will be those who will see the decision not to prosecute as wrong and who will feel that the matter ought to be put before a court for a decision on the criminality of those involved," he said.

"Such views are often based on repugnance for the type of activity undertaken by the developers of Magnum. Many New Zealanders, I believe, are offended by what occurred between the Cook Islands and European Pacific back in 1988-89."

Mr Bradshaw said the Auckland Crown Solicitor had initially advised him that there was "sufficient credible and admissible evidence" which, if accepted and in the absence of evidence to the contrary, would support prosecution against a number of people.

But it became clear after talks with the Crown Solicitor that the issue of sufficient evidence "was far from certain."

Key points in Mr Bradshaw's decision were:

* References in documents to the need for strict confidentiality could be seen as evidence of concealment of fraud but also as European Pacific's protecting its corporate intellectual property.

* Criminal intent would be impossible to prove if independent legal advice had said Magnum was lawful - as the documents suggest happened.

* Different legal opinions on whether there was a legal obligation to disclose all the steps in Magnum.

* A 12-year delay in bringing the matter to court.

- NZPA