First guilty plea from South Canterbury Finance collapse

One of the alleged protagonists in the collapse of South Canterbury Finance in New Zealand has admitted his guilt in the company's downfall. Gavin Bennett, a former director of Datasouth Finance, entered a guilty plea yesterday at Christchurch District Court.

He admitted six charges involving NZ$23 million in fraud against SCF and was remanded in custody pending sentencing.

From 2004, and for the next six years, Datasouth obtained loans from SCF to cover leases over IT hardware and services.

The proceeds of new leases paid, in part, repayments on earlier leases as well. The funds were mainly used to support Bennett's lifestyle, according to prosecutors. Around 900 instances of fraud are alleged.

Four other defendants face charges arising from the collapse of SCF, which, thanks to the government deposit guarantee, has cost the New Zealand Treasury more than NZ$1 billion.