Third CBL fraud accused named as former director Alistair Hutchison in SFO prosecution over collapsed insurer

A third man facing criminal allegations after the collapse of New Zealand insurance company CBL can now be named as former director Alistair Hutchison.

An interim name suppression order for the 83-year-old lapsed today at 4pm after both the High Court and Court of Appeal declined to continue the secrecy and a further appeal to the Supreme Court was not pursued.

The reasons in the Court of Appeal’s September 24 judgment remain prohibited from publication, but the Herald can report Hutchison faces a single count of obtaining by deception.

His lawyer, John Billington QC, had earlier sought suppression for his client because of health concerns cited in several specialist medical reports, the specifics of which have been suppressed.

Billington said the collapse of the NZX-listed company in 2018, with a market capitalisation of $747m, and subsequent investigation by the Serious Fraud Office (SFO) and Financial Markets Authority (FMA), have all negatively contributed to Hutchison’s condition.

Hutchison, who was a non-executive director and CBL shareholder, was charged by the Serious Fraud Office (SFO) in February. He became the third man to appear in a criminal court after CBL’s former chief executive Peter Harris and ex-chief financial officer Carden Mulholland were charged in December 2019.

A group of civil cases are also running concurrently to the prosecutions, including two class actions by CBL’s shareholders, FMA pecuniary penalty actions, and a liquidators’ action on behalf of unsecured creditors.

Charging documents viewed by the Herald show Harris and Mulholland are accused of intentionally not disclosing material relating to the National Bank of Samoa to avoid scrutiny by New Zealand regulators.

The alleged fraudulent strategy, according to the court papers, involved CBL facilitating a €12.5 million loan to now liquidated Danish company Alpha Insurance in 2014.

This was allegedly “obscured by a series of transactions that made it appear the lender was Federal Pacific Group (Singapore) Pte Limited”, the papers read.

The SFO claims the €12.5 million was deposited with the National Bank of Samoa, which then lent the money to Federal Pacific Group before being sent to Alpha Insurance.

At the time, Hutchison was a director of the National Bank of Samoa and was also the founder, owner and director of Federal Pacific Group. The SFO alleges Hutchison obscured the true nature of the transaction.

Harris, 66, and Mulholland, 50, face further charges which Hutchison is not accused of.

The SFO, supported by the Financial Markets Authority (FMA), had sought immunity from prosecution for Hutchison but it was declined by the Solicitor-General.

Harris, who was the CEO and managing director of CBL Insurance and the managing director of CBL Corporation from January 2007, faces five charges of theft by a person in a special relationship, two of obtaining by deception, and a charge of false accounting.

Mulholland is charged with theft by a person in a special relationship, obtaining by deception and false accounting.

They were due to stand trial last month but it was adjourned due to the current Covid-19 outbreak in Auckland.

Hutchison was scheduled to have his own trial in July next year.

CBL’s shares were valued at $3.17 when suspended from trading on NZX and ASX in February 2018 after the company revealed the Reserve Bank of New Zealand had been questioning its solvency.

Both CBL Corporation and CBL Insurance were placed into liquidation by the High Court in 2018.

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