Sacked Otago District Health Board (DHB) chairman Richard Thomson has hit out at Health Minister Tony Ryall, accusing him of political interference.
Mr Ryall today sacked Mr Thomson, saying he was holding him accountable for the $17 million fraud which took place at the DHB over six years.
A defiant Mr Thomson today told NZPA he believed the real motivation to sack him was because he was a Labour Party member.
Mr Ryall's decision reeked of political interference, he said.
"He thought he could get rid of someone who batted for the other side and make some political capital out of it," he told NZPA.
Former chief information officer Michael Swann and his friend and business associate Kerry Harford were found guilty in December last year of defrauding the DHB of $16.9 million.
They are awaiting sentencing.
Mr Ryall said he was sacking Mr Thomson because he had to have confidence the board would operate both effectively and efficiently.
"During Mr Thomson's chairmanship, the largest fraud in New Zealand state services history was taking place at Otago DHB."
Mr Thomson said the fraud started more than a year before he was appointed chairman in December 2001.
Over the next few years IT spending had remained within budget, meaning few suspicions were aroused, until the fraud was eventually uncovered under his watch.
He said Mr Ryall had postured with a series of "infantile press releases" on the issue in a bid to look tough.
Since the fraud was discovered two-and-a-half years ago, three ministers had all made the decision to keep him on and he had been re-elected as the board's second-strongest polling candidate in 2007.
If he had been to blame for the DHB's failure to detect the fraud he would have resigned a long time ago, he said.
Mr Thomson said he would remain on the board.
Mr Ryall has appointed Errol Millar as the board's new chair.
Mr Millar was appointed to the DHB in 2007 and also serves on the Southland DHB.
"The close working relationship between Otago and Southland DHBs will be further strengthened by Mr Millar's experience on both boards," Mr Ryall said.
Mr Ryall had previously asked Mr Thomson to resign over the fiasco - a request he refused.
A number of his fellow board members have backed Mr Thomson saying attempts to remove him were unfair.
Mr Thomson has also gained support from Labour's Dunedin North MP Pete Hodgson, who accused Mr Ryall of political interference.