SCF boss called ‘loyal to a fault’
Lachie McLeod has been described as too loyal to the late South Canterbury Finance (SCF) chairman Allan Hubbard and out of his depth as a chief executive, but was not a fraudster.
McLeod’s lawyer made the remarks in the High Court in Timaru yesterday as New Zealand’s longest and most expensive criminal case came to a close.
The trial began 51⁄ months ago before Justice Paul Heath, and 3000 pages of court transcript later it has finished, with the verdict to be delivered in October.
Former SCF directors Ed Sullivan and Robert White, and McLeod, faced 18 charges.
The charges were brought by the Serious Fraud Office after SCF’s collapse and the resulting $1.58 billion payout under the Crown guarantee scheme.
In his closing, McLeod’s lawyer Jonathan Eaton, QC, painted a picture of a chief executive who was out of his depth and relied on the advice of others, mostly Hubbard.
‘‘Mr McLeod is not a dishonest man,’’ Eaton said. ‘‘Throughout the course of this trial your honour has been armed with much information to make an assessment of Mr McLeod’s true character. Clearly the traits of his character appealed to Mr Hubbard. Hardworking, well liked and loyal.
‘‘The hindsight cynical view would be that Mr Hubbard knew Mr McLeod was not equipped with the qualifications, experience and skill set to carry out what would be the typical CEO role and that might be seen as reflecting a degree of reluctance of Mr Hubbard to lose control.’’
Eaton described McLeod as being loyal to a fault. ‘‘Perhaps he was too loyal to Mr Hubbard. Perhaps, he like so many others, put Mr Hubbard on a pedestal and placed in him too much faith, trust and reliance. Loyal to a fault? Perhaps. Loyal to the point of knowingly engaging in dishonesty? No.
‘‘The proper verdicts on all counts are verdicts of not guilty.’’
The law did not recognise guilt by loyalty or guilt by association to Hubbard, he said.
‘‘It is important to recognise that there is no suggestion that a single dollar was redirected through fraudulent transactions to benefit any accused.’’
SCF had enjoyed extraordinary growth between 2005 and 2009.
‘‘However, the essential structures in place did not develop to cope with that level of growth. It is plain that South Canterbury failed to make a successful transition from being a closely held company to being one of the largest finance companies in New Zealand.’’
When interviewed by the Serious Fraud Office, McLeod described his last 12 months at SCF as being the most stressful of his life: ‘‘I was under immense pressure working seven days a week. Unfortunately, this period was poorly led by the chairman, Allan Hubbard.’’
In closing the trial, Justice Heath thanked the accused for ‘‘the way you have conducted yourself through this trial in what will have been a very difficult experience’’.
He will give his verdicts on October 14.