Prime Minister John Key says former Cabinet Minister Doug Graham will retain his knighthood, despite his conviction for his role as a director of failed finance company Lombard Finance.
Property financier Lombard was tipped into receivership by its trustee Perpetual Trust in April 2008. At the time it owed about 4,400 investors some $127 million. Receivers PwC have estimated secured debenture investors will get back between 15% and 20% of their original investment. As of April 10 this year they had received 13 cents in the dollar.
Here's John Key's full press release:
Prime Minister John Key today announced he has decided Sir Douglas Graham KNZM will retain his knighthood following his conviction as a director of Lombard Finance.
Last week the Supreme Court turned down the application of Sir Douglas and his three fellow directors of Lombard Finance to appeal their convictions for making false statements in a company prospectus. The Court granted the directors leave to appeal their sentences.
“Now that Sir Douglas has exhausted his legal options to appeal his conviction, it is appropriate that I make a decision on the matter of his knighthood,” Mr Key says.
“I have given this matter a lot of thought in the period since it first went to court in 2011.
“I took into account the on-going 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,” Mr Key says.
In deciding that Sir Douglas should retain his knighthood, Mr Key says he was persuaded by three key factors.
“First, Sir Douglas received his knighthood for his leadership role in treaty settlements.
“Second, Sir Douglas was convicted of a strict liability offence, where dishonest or criminal intent is not required for conviction.”
Mr Key noted the High Court found that 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.
“Third, in both New Zealand, and in the United Kingdom, it has been very rare for honours to be cancelled. In those cases where it has occurred, it has often been because the actions that led to the cancellation were in the same area as that for which the original honour was awarded. This is not the case with Sir Douglas,” Mr Key says.
“Sir Douglas retired from Parliament in 1999 leaving a significant political legacy in the area of treaty settlements that subsequent Labour and National-led governments have worked to build on.
“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 says.
For similar reasons, Mr Key will also not be recommending to the Queen or the Governor-General the cancellation of other honours held by Rt Hon Sir Douglas Graham, Hon Bill Jeffries and Lawrence Bryant LVO.