Ex-Fortex chief executive goes to trial on banning charges

By Chris Hutching

Friday 7th December 2001 1 Comment

Former Fortex Group convicted fraudster Graeme Thompson will stand trial on charges of being involved in management of a company within five years of conviction on criminal charges.

A judicial review, carried out by Justice Lester Chisholm and released this week, upheld a District Court judgment and ordered a hearing in two weeks' time to set a date for Thompson's trial.

Thompson (57) was convicted in 1996 and sentenced to six-and-half-years' jail for falsifying the Fortex accounts along with other accomplices, who received shorter sentences or were not charged after they cooperated with police and gave evidence against him. The meat processor collapsed with more than $100 million in losses, much of the money owed to farmers who had supplied stock.

Upon his release from prison Thompson began working with business partners Manfred and Ulrike Herzhoff.

The relationship between Thompson and the German couple began in 1993 while Fortex was still the darling of the New Zealand corporate scene, receiving regular accolades from business and political leaders like the then finance minister, Ruth Richardson.

While on pre-release - he was out in September 1998 - Thompson undertook unpaid work for a meat exporting company set up by the Herzhoffs' called Health & Nature and later made an arrangement to work for the company and share the profits. But the partners fell out because the Herzhoffs say they found evidence that Thompson was approaching clients without their permission.

They sought unsuccessfully an injunction against Thompson in 2000 and then complained to the registrar of companies, citing s347 of the Crimes Act relating to convicted business people managing a business within five years of conviction.

Thompson was committed for trial late last year by two justices of the peace. He then applied to a District Court judge for a discharge on the grounds there was insufficient evidence to justify trial and that even if an offence could be proved it would attract minimal punishment and the expense of a trial was not justified.

The discharge was refused so Thompson, represented by Bruce Squire QC, sought a judicial review of the judge's refusal to discharge.

Justice Chisholm noted the District Court judge's comments that there was evidence that Thompson attempted to become involved in business immediately after his release from jail in a manner that could be described as sailing close to the wind.

"Furthermore while I must confess to some disquiet regarding Mr Herzhoff's motives in making the complaint to the Companies Office, in the sense that he was apparently a willing party to Thompson's close-to-the-wind sailing, It would be inappropriate to exercise the s347 discretion (to discharge) in the present circumstances."

The matter ultimately came down to a question of degree and overall pattern of conduct, Justice Chisholm says in his review.

The key legal issue is whether Thompson was involved in management or operational matters for the company.

"This is certainly a borderline case. But I need to obey the strong direction in Auckland District Court v Attorney-General that the power to review is to be sparingly exercised and will only be appropriate in rare case where by reason of the nature of the error, intervention on the part of this court is imperative. After reflecting on that aspect I have decided, albeit with some misgivings, that his is not such a case," Justice Chisholm says.

Comments from our readers

On 11 May 2011 at 7:43 pm Frank said:

yeah. I think he is a crook. I also think the new mob aren't so exclusive either. Just a hunch :)