Former SCF boss denies misconduct
Nigel Gormack, a Timaru accountant who briefly headed South Canterbury Finance, faces being thrown out of the professional accountancy body as a result of complaints from former clients.
Gormack is facing a hearing before the disciplinary tribunal of the New Zealand Institute of Chartered Accountants (NZICA) in Wellington, which began yesterday. He has already pleaded guilty to some of the charges.
A partner at Quantum Advantage, Gormack was previously a partner at Hubbard Churcher, an accountancy firm set up by late Timaru businessman Allan Hubbard.
For about a month in 2009 he served as chief executive of South Canterbury Finance, at the time the largest financial institution in the South Island. In 2010 the company was placed in receivership, triggering a $1.6 billion government bailout.
Gormack was also a director at Prime Port, the owner of the Port of Timaru.
He resigned from that position on Monday.
At the start of the hearing Gormack pleaded guilty to charges of conduct unbecoming of an accountant and of breaching the institute’s code of ethics, both breaches of the NZICA Act.
However, he denies a charge of misconduct in a professional capacity.
Richard Moon, head of NZICA’s professional conduct committee, said the committee regarded the charges against Gormack as ‘‘very serious’’, including elements of deliberate conduct and selfinterest.
The charges ‘‘put Mr Gormack’s membership [of NZICA] in serious jeopardy,’’ Moon told the tribunal.
The two complaints had a number of similar characteristics, Moon said, including the failure to manage conflicts of interest.
The hearing saw testimony from a number of witnesses, including longterm clients of Gormack who said they were attracted into investments because of his business acumen and the fact that he was also putting money into the investments.
According to Moon, Gormack is to present no evidence to the tribunal.
Rachel Farrant, a partner at BDO who gave an assessment of the complaints as a professional witness, said Gormack’s failure to disclose key pieces of information to investors showed a ‘‘lack of diligence or professionalism’’.
The financial statements Gormack provided did not enable investors to understand the transactions being described and he ‘‘did not perform his work with due care and to a proper professional standard’’.
The hearing is set down for up to three days but it is expected to conclude today.