Harawira Hone: Financial Service Providers (Pre-Implementation Adjustments) Bill — First Reading 
Harawira Hone: Financial Service Providers (Pre-Implementation Adjustments) Bill — First Reading 
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HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 A kia ora mai ano ra tatou katoa e te Whare. It is good to hear that the new head of the Serious Fraud Office has made checking out these finance companies one of his main priorities although that is likely to bring no joy to the 14500 investors who lost more than $460 million after the collapse of Bridgecorp a couple of years ago or to people like Jack and Ngaire Williams a couple of senior citizens who lost more than $200000 in the collapse of Blue Chip. Last year they were told that their house would be sold off to pay their debt which led to the heart attack of Mr Jack Williams. 
Exactly how underhand some of these arrangements were came to light in the Auckland District Court as recently as yesterday when a former staff member told the hearing against the Bridgecorp directors that staff were advised to lie to angry investors who rang the finance company asking why they had not been paid and to say that the lack of payment was because of a banking glitch. It was a fairly significant glitch—$460 million. But there was even more gloomy news from KPMG which reported that fraud in this country last year rose to record levels. Its forensics expert said that committing fraud was likely to reach even greater levels in the future. 
It is in this context that the Financial Service Providers (Pre-Implementation Adjustments) Bill before the House is a welcome respite because it aims to change the Financial Advisers Act to better monitor financial service providers in order to tidy up the sector and make it more accountable to investors. We all know stories of people who have lost precious savings to dodgy finance companies believing there were standards in place and proper monitoring procedures when in fact the brutal reality was that they just were not there. Thankfully most Maori businesses did not get too caught up in the fast finance fiasco to backstop their growth because the security that was often required was their land whereas banks are now securing loans over cash flow stock equipment and machinery rather than the land itself. 
I also take this opportunity to thank Iria Whiu of Ngati Ranginui the first Maori national president of the New Zealand Educational Institute back in 1995 who helped set up the group that Mr Boscawen was talking about formed after the Blue Chip collapse. Exposing Unacceptable Financial Activities was formed to help victims of the collapse with slim hope of ever retrieving their funds. In following on from the ACT speaker I guess I have to raise the whole issue of the “three strikes” bill and the fact that a person can go to jail for the rest of his life for bashing people yet those guys can steal $460 million which no doubt has directly resulted in the heart attacks deaths and suicides of a number of people. They are in court now and the chances are that the maximum sentence they will get is maybe 2 years probably down at Ohura which is the country club prison that most of these guys go to. 
It is kind of a sad society when people can get away with this kind of thing and I do not know that this bill will do enough to teach them a lesson. This is just the first reading so there will be the opportunity to raise it again. Of course at the select committee we might write into the legislation that when these companies fall over the directors will also be held accountable for the health and lives of any of the investors they have diddled. Quite frankly it is not just about a loss of product it is about ripping people off. I think we have to be honest enough in this House to say that this is not about just investment—a lot of it clearly is not. The directors did not backstop themselves with alternative funding arrangements. They set out specifically to rip people off. They got their staff to lie to investors to try to cover their backsides until such time as some of them could skip out of the country. 
Mr Boscawen also quite rightly mentioned that of all those companies that have gone to the wall it looks like only about two or three directors will end up going to court on it. In fact a whole heap of these people should be going to jail. The problem of course is that all of the jails are full and even if they were double-bunked there are not that many cells in Ohura. Certainly none of these guys would be put up in Paremoremo the Mount or Ngawha because they are likely to get their just desserts. 
We need to start saying that this kind of crime given its spread right across society is far more dangerous to the health and welfare of our society than those who are charged with just assault. Yes assault is brutal but no more brutal than $460 million worth of straight-out theft from investors most of whom are probably Pakeha older kind of the age group of some people around here and wealthy kind of like the people on this side of the House over here. But be that as it may I sincerely hope that during our select committee hearings we can investigate ways and means of making it even tougher for these guys to even contemplate pulling scams that will rip people off. Kia ora Mr Assistant Speaker. Tena tatou te Whare.