Inland Revenue's involvement with the transaction at the centre of the Winebox allegations appears to be over, despite no charges being laid or tax recovered.
Department litigation director Mike Lennard said Solicitor-General John McGrath, QC, had advised that if charges were to be brought, it should be under the Crimes Act
rather than under tax legislation, and "if at all, by the Serious Fraud Office [SFO] rather than by Inland Revenue."
The so-called Magnum transaction was allegedly used in 1988 and 1989 by European Pacific, the company once owned by Fay, Richwhite, the Bank of New Zealand and Brierley Investments, to avoid paying $2 million in tax.
The SFO director at the time, Charles Sturt, decided there was insufficient evidence to warrant a prosecution - a position upheld by Sir Ronald Davison during the Winebox inquiry.
However, last August the High Court ruled that Sir Ronald had applied tax law incorrectly in finding there was no evidence of fraud or tax evasion in the Magnum deal.
As a result, the SFO and department had been considering whether to reopen their inquiries into the Winebox.
Mr Lennard said yesterday that Mr McGrath's advice meant it was up to SFO director David Bradshaw to decide if it was possible or appropriate to prosecute anyone over the Magnum transaction.
New Zealand First leader Winston Peters - the man who first raised the Winebox allegations in Parliament - yesterday condemned Mr McGrath's advice as "immoral buck-passing."
- NZPA
