Graham retains his Knighthood

The PM has announced:

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.

I think they key is No 1. It isn’t like the situation in the UK where a bank chairman got his knighthood for his services to banking. Some of those who lost money in Lombard won’t be happy with the decision, but Sir Douglas has gained a criminal record for his failings on the Lombard Board – and that is a permanent stain on his record – along with the eventual punishment of the court.

Also of interest is this NBR story in which former Appeal Court Judge Ted Thomas labels the convictions of the directors a miscarriage of justice,