The decision whether or not to strip Lombard Finance director Sir Douglas Graham of his knighthood would be a "very big" and complex call, and will not be made until Sir Douglas and other Lombard directors had made it clear they were not taking further legal action over appealing last week's convictions, Prime Minister John Key says.
Sir Douglas, a former National Party Justice Minister in the Bolger government, along with fellow Lombard directors Bill Jefferies (himself a former Labour Party Justice Minister), Lawrie Bryant, and Michael Reeves, were found guilty of four out of five charges laid against them by the Financial Markets Authority relating to their roles in the collapse of property financier Lombard Finance in 2008.
The ruling in the Wellington High Court last week sparked calls from Lombard investors for Sir Douglas to be stripped of his knighthood, a decision that would have to be signed off by the Prime Minister.
Speaking to media in Wellington this morning, Key said he would look at the issue once the four had been sentenced on March 29 and depending on whether they decided to take further legal action over the ruling.
“If they’ve exhausted all of that then obviously the matter should be considered by me, and it will be,” Key said.
Key had asked the Cabinet office “some days ago” for general advice to get a sense of what had happened previously with other cases like this.
“It’s a complex area because we haven’t had lots of people in this position, but we have had some in the past,” he said.
“I always just make sure I absolutely understand what the precedent has been, and there’s a degree of fairness [in needing to know precedents before a decision is made]. If that move was to occur that would be a very big call. Sir Douglas Graham actually made an enormous contribution to New Zealand," Key said.
However in the eyes of the law Graham had got things wrong in the case of Lombard Finance, he said.
Key said he had huge sympathy for Lombard’s investors.
“Finance companies robbed huge numbers of New Zealanders of their nest egg retirement savings. They were entitled to have better protection, the law didn’t protect them and I have great sympathy for them," he said.
“We just need to weigh up all the different factors.”
(Updates with video)