A "deeply religious" Auckland businessman arranged for his factory to be burned down and then made an audacious bid for more than $3 million from his insurance company.

Vijendra Naiker, 53, was jailed for 3 years 9 months this morning after being found guilty at trial at Auckland District Court on counts of arson and dishonestly using a document for a pecuniary advantage.

Insurance company IAG said the investigation of the fraudulent claim and a protracted court case had cost them more than $1.3m - one of the most expensive in its history.

But no reparation order was made against Naiker because of his limited means.


In mid-2008, the owner and managing director of Sargam Foods Ltd found his business, producing snacks like samosas and quiches, facing financial ruin.

Progressive Industries, to which the company supplied food, was also planning an audit after instigating new quality-control standards.

"You decided to burn down the premises," Judge David Sharp said.

Naiker enlisted the help of a friend - truck driver Rashikendron Reddy - who recruited another man to assist with the arson.

Oliovaigafa Neru agreed to participate on the basis he was paid $500.

The day before the fire, Naiker showed them around, pointing out alarms, security cameras, where they should break in and a spot in the office where records were kept where the fire should be lit.

He hid the true nature of the visit from his employees at the Henderson business by having Neru fill out a shonky job application.

On November 15, 2008 the duo executed the plan and the premises on Bruce McLaren Rd was gutted by fire.


Naiker stood on the roadside with his family playing the part of the crestfallen business owner who had seen his dreams go up in smoke.

Insurance investigators were on the scene soon after and when he made a claim for more than $1m just days later he was soon told by IAG they would not be paying out.

Undeterred, Naiker lodged civil proceedings against the company with the High Court.

The final figure he claimed they owed him reached $3,820,710 and the matter has been put on hold pending the resolution of the criminal charges.

IAG's deputy general counsel Seamus Donegan described it as a "lengthy and expensive" process.

He said the amount of resources Naiker's claim consumed meant staff had to juggle it with legitimate claims from distressed Christchurch home owners affected by the earthquake.

Mr Donegan explained customer premiums formed a pool of funds to pay out claims and fraudulent claims were effectively theft from that pool.

Naiker's lawyer Ian Brookie said the drawn-out proceedings had had a severe impact both mentally and physically on his client.

"He has, despite all this happening with the fire, contributed to the Fijian-Indian community in west Auckland," he said.

"He is a deeply religious man and continued to contribute despite how long these proceedings have taken."

Judge David Sharp gave Naiker credit for his clean criminal record and the difficulties he had faced in being on bail for four years.


On the last day of Naiker's trial in Auckland District Court the foreman of the jury received a text message from his boss containing prejudicial information about the case.

When he raised it with Judge David Sharp he was discharged and the remaining jurors eventually found the 53-year-old guilty on both counts.

After sentencing today, Mr Brookie said he would be appealing his client's convictions and applied for bail.

He believed other jurors had possibly been "contaminated" and that had compromised Naiker's fair-trial rights.

Crown prosecutor Ben Finn said there had to be "exceptional circumstances" to see bail granted and though there were arguable grounds for an appeal, he believed they were not strong.

Though Naiker had shoulder surgery booked for next months and problems with angina, Finn said his ailments could be adequately managed in jail.

Judge Sharp agreed the circumstances did not meet the threshold and remanded Naiker in custody.

He said it had been a "difficult assessment" dealing with the jury foreman issue but he stood by his decision.

The appeal will likely be heard early next year.