Gong decision angers Lombard investors
PRIME Minister John Key’s decision not to strip former justice minister Sir Douglas Graham of his knighthood ‘‘makes a mockery’’ of the honour, angry Lombard investors say.
However, it is understood that Sir Douglas, who could not be reached last night, has indicated to Mr Key and others he will not actively use the title.
Mr Key said yesterday that he would not take away the former Lombard board chairman’s knighthood in spite of his conviction for making false statements in a company prospectus.
The Supreme Court last week turned down an appeal bid by Sir Douglas and three fellow directors against their convictions but granted them leave to appeal against their sentences.
Mr Key said that as Sir Douglas had exhausted his legal options on the conviction, it was appropriate to make a decision on his knighthood.
‘‘I have given the matter a lot of thought in the period since it first went to court in 2011,’’ he said.
‘‘I took into account the ongoing financial hardship that many Lombard investors suffered as a result of the company’s collapse.
‘‘Many people through no fault of their own have lost some or all of their future financial security, and that is an awful position to be placed in,’’ he said.
He had spoken on Thursday with Sir Douglas, who had understood the decision but would make his own choice on whether to use the title.
Lombard investors, who together lost millions when the finance company collapsed in 2008, reacted angrily.
Maurice Fuller of Christchurch said it ‘‘made a mockery’’ of knigh- thoods, adding that Sir Douglas ‘‘should not have the privilege anymore’’.
‘‘I shouldn’t imagine knights of the realm should be wandering around with bloody convictions under their belt.’’
Wellington man Paul Wah said Mr Key had ‘‘missed an opportunity’’ to maintain the prestige of titular honours. ‘‘The message is that it’s all right for a knight of the realm to commit indiscretions and be excused on the grounds of some sort of technicality.’’
Sir Douglas should have relinquished the honour himself, he said.
Mr Wah hoped the receivers would now proceed with a class action which could see investors get some of their money back.
Mr Key said his decision was influenced by Sir Douglas’s offence being a strict liability one, where dishonest or criminal intent were not required for conviction.
The High Court had also found Sir Douglas and the other defendants acted honestly at all times, genuinely believed the statements in the amended prospectus were true and that careful attention had been given to the contents of the amended prospectus, including taking legal advice, he said.
There was also no precedent for removing a title in this situation.
Sir Douglas, who retired from Parliament in 1999, had left a significant legacy in the area of Treaty settlements. ‘‘New Zealand is a better country today because of the work Sir Douglas did as Treaty negotiations minister, and my judgment is that he deserves to retain his knighthood.’’
Mr Key would also not recommend the cancellation of honours held by fellow directors, former Cabinet minister Bill Jeffries and Lawrence Bryant.