SFO lays 90 fraud charges in LWR collapse
The Serious Fraud Office (SFO) investigation into the collapse of Canterbury clothing manufacturer, Lane Walker Rudkin Industries (LWR), has resulted in criminal charges against its director Kenneth James Anderson (64) and another individual.
SFO lays 90 fraud charges in LWR collapse
The Serious Fraud Office (SFO) investigation into the collapse of Canterbury clothing manufacturer, Lane Walker Rudkin Industries (LWR), has resulted in criminal charges against its director Kenneth James Anderson (64) and another individual.
Mr Anderson faces 61 charges, brought under the Crimes Act, relating to allegations that he fabricated financial documents in order to obtain and retain lending facilities from Westpac New Zealand Limited (Westpac), ultimately totalling $118 million.
He is also facing a further 21 charges relating to the alleged use of fabricated documentation to obtain funds under a letter of credit facility provided by Westpac.
Another person, who has name suppression, is facing eight charges in relation to the letter of credit facility.
SFO Acting Director, Simon McArley, said, “The fraud alleged to have occurred here has had a profound effect on the region, with LWR having employed many staff and enjoyed an international reputation.
“While its demise is unfortunate for the Canterbury people, upholding the integrity and credibility of New Zealand businesses is essential for our future success.”
LWR was incorporated in 2001 and placed into receivership in April 2009.
The SFO’s investigation commenced in September 2009 following concerns raised by the company’s receivers, BDO Spicers.
Mr McArley said that, although the investigation had experienced a number of delays due to the Canterbury earthquakes, the scale of losses and high level of public interest demanded perseverance with the case.
“We will never let speed compromise the quality or thoroughness of an investigation, particularly in a case such as this which has enormous local interest,” Mr McArley said.
For further information
Sarah Knowles
Media Liaison
Serious Fraud Office
Phone: 021 675 998
Note to editors
Background to investigation
Lane Walker Rudkin Industries Limited and associated entities were placed into receivership on 28 April 2009.
After considering a complaint received from the receivers, BDO Spicers, the Director determined that an investigation into the affairs of LWR Group may disclose serious or complex fraud.
An investigation under Part Two of the Serious Fraud Office Act was commenced on 17 September 2009.
Crimes Act Offences
Section 228: Dishonestly taking or using document
Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration,—
(a) dishonestly and without claim of right, takes or obtains any document; or
(b) dishonestly and without claim of right, uses or attempts to use any document
229A Taking or dealing with certain documents with intent to defraud
Role of the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.
The SFO operates three investigative teams:
- Fraud Detection & Intelligence;
- Financial Markets & Corporate Fraud; and
- Fraud & Corruption.
The SFO operates under two sets of investigative powers.
Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”
Part 2 of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”
The SFO’s Statement of Intent 2011-2014 sets out the SFO’s three year strategic goals and performance standards. It is available online at: www.sfo.govt.nz(external link)