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June 2013 Edition

We wish to highlight the Government led 2004 Feltex IPO mass robbery which would have been assessed to cause deaths at time of contemplation and has done so, and also our vilification of the character of both the current president of the NZ Institute of Chartered Accountants and the current president of the New York based International Federation of Accountants. We wish to devote our front page to both. The two events are somewhat connected of course. Elizabeth Hickey became, or should have become, infamous when she was a party to falsely and deliberately giving an unqualified audit report to the 1990 Bank of New Zealand annual accounts. She knew full well that the Bank had not used the Yield to Maturity method to allocate interest earnings between accounting periods on two huge parcels of long term zero coupon bonds (investments) which the Bank had purchased in 1988 with such a purpose in mind. The profit was inflated by $80m+ by this illegal doing. It was a case of false accounting being used by assumed experts on behalf of both major political parties, to benefit these parties, the parties in turn promising that the accountants concerned will not get into trouble. The Government appointed Securities Commission delivered on this promise in a corrupt report put out in May 1993. Elizabeth Hickey was a member of the Commission at that time but that was not mentioned in the report. The report correctly stated that the Yield to Maturity method was the correct method to allocate the earnings on the bonds. It said Ms Hickey did not rationalize things correctly with respect to one parcel of bonds and made what it claimed was an unfortunate mistake with respect to the other parcel. It said accountants needed more education on such matters which was a load of rubbish. Accountants had had a very good run down on YTM in 1987 and with respect to financial reporting earlier. The report did not canvass what instruction accountants had received on the matter. The BNZ 1990 $100m false profit had nothing to do with ignorance and everything to do with corruption.

It was from this point that the current (2013) president of the International Federation of Accountants came strongly into the picture. Warren Allen, as deputy chair of the NZ Society of Accountants and a partner of Ernst and Young who did the BNZ audit determined that low paid accountants and not members or former members of his firm should pay for NZ accountants losing reciprocity with accountants from other industrialized countries. He introduced an expensive continuation regime on all accountants who wished to stay in the mainstream. Elizabeth Hickey was a registered presenter of the revamped and somewhat compulsory courses and made the most of her status.

Warren Allen became the auditor for the Accident Compensation Corporation. He allowed it to be set up so that it accumulated considerable wealth which could occasionally be leaked to causes the politicians secretly wanted funded. The buying of National Mail shares a few days before that company went out of business occurred on his watch. He expressed no public concern about it. We show again this letter in which he lies to the Accountants Institute about the Securities Commissions ruling on the 1990 BNZ accounts. The press had ignored the auditor’s role in this crooked action, no doubt at the Government’s behest. Both he and Ms Hickey worked on the principle that nobody knew about it. Warren Allen was no doubt involved in the Feltex IPO mega-crime.

These two crooked accountants need to be dumped from the respective organizations forthwith. Admittedly neither organization seems to be worth a tin of fish. But the public understandably is prone to taken in by them. The audit system should work to keep the public in the picture and occasionally does. Why anyone would put a million dollars or two into an outfit like Ross Asset Management without enquiring who the auditor was and checking that they were qualified and the audits were up to date is hard to know. Any accountant who recommended RAM to anyone could not have done this check and should be struck off the institute register. Actually David R G Ross was dealt with by the Institute’s disciplinary Tribunal in December 2012. He was a member of the Institute but the membership was suspended by the tribunal. If he didn’t advertise the fact few people would realize that he was a member of course except for people who should have checked him out given his activities. Members are not allowed to offer accounting services to the public without holding a Certificate of Public Practice from the Institute. Rule 18.1.(b) of the Institute says any conduct that infers one might be offering accounting services to the requires the certificate. But the tribunal has not mentioned anything about this. It is hard to believe that they did not get any enquires about Mr Ross. But this is all a bit relevant when the Institute supports Government corruption. The CEO is now Craig Norgate. He gets lots of mention on this site. He has too much history in matters accounting to be able to do an impartial job. The Institute is trying to merge with the Australian Institute, probably so it can’t get its members into trouble. That is why the Society closed down to be replaced by the institute.

It would be unfair not to mention the 1990 BNZ audit partner Peter Garty as also willfully issuing this unqualified audit report knowing the $100m profit to be false. We believe he is still CFO at Wellington City Council. He has a new boss as CEO which might change things. But another development is ex cricketer John Morrison is standing for Mayor of the city. He at one stage run a radio sports program sponsored by St Lawrence, a finance company which has since gone broke (surprise, surprise). Peter Gary was the CFO there about the same time so that might be how he came to get the Council job. We say Mr Garty is not fit to be there. The Council would seem to have given rates arrears concession to the founder of the cities football team Terry Serepisos which we think Mr Garty might have gone along with. We think Mr Serepisos would have known that his empire was collapsing before he established the team. Effectively it would then be financed by his loss making creditors. Sport and shakey finance get mixed up too often. While on Local Authorities Lianne Dalziel appears to be standing for the mayor of Christchurch. This politician has paid tribute to Elizabeth Hickey without due cause, and reappointed her to the Securities Commission. She has also been Commerce Minister when the wayward crowd which claimed to have investigated the Feltex IPO were appointed. She might not have instigated that, indeed it might have given her a period of ill mental health, but she has been associated with that scam. We hope Local Authority voters will be able to see through these issues and vote wisely.

We would like to devote a paragraph to the Lundy appeal. The defense at the trial knew evidence about the (early) time of the deaths based upon the state of food digestion was shaky. But because they thought that the “window of opportunity” for an early death time was not big enough they did not challenge the digestion evidence. Lundy was convicted but of course it is not known if the tactic had any relevance to the conviction (unless the jury was surveyed which is something we are always suspicious of). The “concrete” alibi applied between about 7.30pm and 2am. We can believe that there might be little digestion for the first few hours but 8 hours was stretching it rather much. The Prosecution says not challenging the digestion evidence was a tactic of the defense, but still says the deaths occurred at the early time. There is a lack of rational there. We again present herewith updated evidence of the 2004 "Feltex IPO robbery for Olympic medals" scandal which involves both major NZ political parties.

We present now our latest insights into the scandal. We accept that we are very slow at picking up on things and the general knowledge of the accounting fraternity will be well ahead of us. But that fraternity does not disclose anything. We say Accountants who keep quiet on this and similar matters are themselves corrupt.

Firstly we have more evidence as to the crookedness of Sir Eion Edgar if more evidence was or is ever needed. This article was put on Stuff and probably other Fairfax publications in May last year but we only come across it in April this year 2013. It tells of Sir Eion selling $40,000 of shares at a loss of a similar amount in order that he might receive an extra million dollars of such shares at the expense of other ordinary shareholders, upon the conversion of preference shares to these ordinary shares. The values quoted are fickle but that is no excuse. We say too much was made in this article of the company concerned, Blis, being a minnow or molehill. The same principles apply regardless of size. We say Sir Eion should have been in the headlines. We say the article should have referred to Sir Eion’s role in the Feltex IPO. We say Sir Eion was relying on an unofficial immunity from prosecution which has been conferred upon him along with his knighthood for his “services rendered” in respect to the “Feltex IPO” which we expand upon below.

Then in February 2013 the same people put out this follow-up because the Stock Exchange has not reported on its investigation. But there is a lot of nonsense added to it. The author has given himself the name of Chalky. We think the publication does not really want to expose this indiscretion of Sir Eion. Interestingly the “tough” Financial Markets Authority declared that there was nothing wrong with the practice. They are just Government puppets.

To move on, our latest thinking is that the Feltex IPO for gold and silver medals has an Australian dimension. Australians were embarrassed in 1984 when they got 4 gold medals at Los Angeles Olympics in 1984 (NZ got 8) despite the withdrawal of the Soviet Bloc. They made amends to that by legitimate means but the results in future years have been so good that it seems illegitimate tactics have also been employed. We are suspicious of the story that they discovered that their swimmers where over-weight so sent them on morning runs to correct the problem, as being the full truth. When NZ got one gold and no silvers in Sydney in year 2000 it seems Australia has agreed to “share” their “skills”. We note the following connections:

A The first is not a highly convincing connection but nevertheless is worth mentioning. The 2000 Summer Olympics were staged closer to the Australian winter, in late September. Feltex carpets bought the Australian carpet plants of Shaw Industries in March 2000, so the purchase was not in response to NZ’s poor Olympic performance but it might have been in response to an anticipated poor Olympic performance. NZ really only had one gold prospect. Helen Clark had come to power in late 1999 and would promptly be looking for ways to extend her reign.

B Feltex, a NZ company progressively moved its head office to Australia without indicating it was doing so. The non-NZ content of subscribers to the 2004 IPO was however very low, about 1%. Its Australian workforce must have been kept away from it with the assistance of the Australian establishment. One Australian institution did invest however and has been protesting strongly.

C Two Australian crooked female academics, “Plane” Jane Diplock and Keitha Dunstan, came across the Tasman to take up seats on NZ’s Securities Commission. Diplock became the commission chair while Dunstan (who was perhaps born male) had a special unit at Wellington’s Victoria University set up for her which was dismantled on her departure. With a couple of NZ females they formed the quorum which looked into the Feltex IPO with their eyes closed along with their advisor on the matter, former South African Kevin Simpkins who also seemed to get a special unit at Victoria. He is still around though unfortunately.

D The Audit firm Ernst and Young were able to confuse their Australian and New Zealand operations so as not to be caught out too much. Gordon Fulton came before the accountants disciplinary tribunal and argued that the work complained about was actually done in Australia. He just signed the audit report to give it an NZ face as the directors wanted. The tribunal referred the matter the Australian Securities Commission or some such and nothing has been heard further. It should be mentioned hear that Warren Allen, the current (2013) chairman of the International Federation of Accountants was auditor of ACC when this corporation put $9m into the Feltex IPO, virtually the only NZ Institution to put anything in. If he was any good he would have immediately disclosed the crooked nature of this ACC action. Click here to read further on this so called accountant.

Back to our previous script on the Feltex IPO. The IPO was in May 2004 and the Games were held in August that year. What happened is senior elements of the Labour and National parties conspired to promise protection from prosecution, or at least conviction, for people, led probably by (Sir) Eion Edgar, who proposed selling the worthless company, Feltex Carpets which had a good name in NZ, by way of an Initial Public Offer on the Stock Exchage to amateur investors, for the princely sum of $250m.

We remember around that era an announcement that the National and Labour parties were conferring to develop joint policies in their mutual interest. We know of no announcement of any resulting policy. However the “Feltex IPO“ was undoubtedly an illegal outcome of such negotiations. The National party in 2004 had a new leader in Don Brash who no doubt was keen for the party to recover from its 27% vote in the 2002 election. Mr Brash made a controversial speech at Orewa in January 2004 which improved the party’s polling, probably by attracting those with anti-Maori sentiment. He would also recognise that a good result for the country at the forthcoming Olympics would help the country return to its traditional voting patterns.

Let it be stressed that the Labour Party which was in power in 2004 had equal or greater reponsibility for this crime. It was the one with most to gain in the short term. It was the one which engaged corrupt officials or corrupted them when in office. There is of course little or no excuse for officials to allow themselves to be corrupted. They all must face jail.

Let it be stressed that this action was a crime. While a majority of members of parliament can do almost anything by way of Act of Parliament, this process was not followed here, and hence MPs have the same rights to break the law as ordinary citizens. None.

Our presentation is a little back the front on this occasion because we wish to present our latest and hence least publicised evidence first.

It concerns New Zealand’s latest Olympic perforance in London in July/August 2012. In terms of gold medal per capita NZs performance was ridiculously high, matched only by Jamacia. NZ “won” six gold medals. This follows three gold medals “won” at each of the Beijing and Athens games, also very high performances per capita.

The uneven composition of NZs recent Olympic hauls combined with the high golds per capita make it a giveaway that cheating is involved. Its gold,silver,bronze stats in London of 6,2,5 (3,2,4 Beijing 3,2,0 Athens) compares with some former Olympic host nations like Canada 1,5,12 Sweeden 1,4,5 Finland 0,1,2 Greece 0,0,2 Mexico 1,3,3 and similar sized countries to NZ, Norway 2,1,1 Belgium 0,1,2 Denmark 2,4,3 Ireland 1,1,3. Netherlands did 6,6,8 but its population is 4 times that of NZ.

It is quite clear that NZ has been buying licenses to cheat in particular events from corrupt Olympic officials. This has started with the Feltex IPO in 2004 which robbed $250m off amateur investors to buy such licenses. Eion Edgar was closely involved with that IPO as well as chair of the NZ Olympic committee at the time and also then got a major NZ “honour” which eventually converted to an knighthood to help make him “untouchable”. The composition of NZ medals between gold silver and bronze is a dead give-away that cheating has gone on. There are many events where only one entry per country is allowed. The superpowers naturally have a good chance of winning these (and all) events and hence they have a disproportionately high number of gold medals because often you can’t get a lesser medal having won the event. As a result one would expect smaller countries to have higher proportions of minor medals, but not so NZ in recent times.

The trouble with selected case drugs cheating is that it is presumably quite easy to produce a gold medal, you just administer a big dose. But getting a silver is a different kettle of fish. If the dose is too big you get another gold, too small and its a bronze or less. One way is to give a large dose to two competitors in the one event as we suspect was done in the triathelon at Athens, but this can’t be done too often. As is fully understandable NZ’s 2012 “haul” has a dearth of silvers and those it did get (including one temporarily held) came quite late in the circus.

The story of Ms Adams not being entered lacks credibility. Firstly it would been known very early in the piece if the world champion and 2008 Olympic champion had genuinely not entered and the matter would have been sorted out then. Secondly, according to the rules either she would be allowed to compete or she would not have been. They would be sure of the ruling before they said anything and they would not chop and change. It is obvious that an agreement had been reached that if NZ was winning too many golds, either absolutely or in relation to silvers, then Ms Adams would have been deemed not to have entered, so as not to aggravate the problem. But at the last minute an arrangement has been made that her rival would be licensed to win so probably giving NZ a much needed silver. But the protocols for a licensed win understandably were not followed and the rival has got caught. The rival has correctly we think claimed that Ms Adams “non-entry” was related to cheating but the media won’t examine the evidence. They just vilify her as is the popular thing to do.

Of NZ’s other silvers one was in a highly peculiar yachting event when it was known with many races remaining that NZ would get silver and could only get silver. The other was the lady BMX cyclist who we speculate was probably told she could have a good result if she promised only to get silver. The winner was in the lane next to her and she followed the winner in about a spoke length behind.

Numerated pieces of the proving jigsaw follow. Further editing is intended:

1 Feltex Carpets was in financial difficulties with its bank in the years 2001 and 2002. It got a $50m debenture loan from someone to relieve the condition. The debenture was repaid by the IPO raid and the indications are that it was agreed that this would happen when the loan was given. Evidence of Mr Fulton of Ernst and Young and Mr Nichol of McGrath Nichol supports this.

2 Eion Edgar was appointed to the board of the Accident Compensation Corporation and chairman of its Investment Committee in Nov 2002, apparently for a 3 year term. The ACC was virtually the only NZ institution to subscribe to the Feltex IPO and did so to the tune of $9m. Around the year 2000 the ACC bought National Mail shares about a week before that company went out of business losing ACC $0.5m . The vendor was a close associate of a director of National Mail. The broker for the both parties was Credit Suisse First Boston, using different names ie Credit Suisse F B and C S First Boston. This firm is associated with the vendor, promoter and a joint lead broker, of the Feltex IPO.

3 Eion Edgar was elected chairman of the New Zealand Olympic Committee about 2003. He was chairman of the other Feltex joint lead broker, Forsyth Barr, at that time. He resigned as chairman of Forsyth Barr soon after the Feltex IPO and then resumed the position, which he still holds, soon after Feltex collapsed. There was public dismay that NZ had won only one gold (and three bronzes) at the Sydney Olympics despite perhaps having the largest team per capita. The Government had been funding prospective medal winners quite extensively. Presumably it believed it had a public mandate for this and that a good Olympic record was good for the electoral popularity of the major political parties. There was a "need" to look for more cost effective ways of winning some medals. Appropriation of Public funds for cheating was not feasible. Some other source of funds “needed” to be found to get the medal tally up.

4 Eion Edgar received a high NZ honour about 2003 which he converted into a knighthood more recently. He was in 2009 named inaugural Senior New Zealander of the Year, an award which may have been instigated to keep up his status and invincibility. He had just met the qualifying age for such an award.

5 Joan Withers was appointed to the Feltex board just days before the IPO was released, to become the company's only female director. It could be anticipated that a female director would appeal to "Mum and Dad" investors. Soon after Feltex's profit down- grade announcement in 2005 Ms Withers resigned from Feltex and the remainder of her considerable portfolio of directorates (except the Auckland Airport one) to take up an executive position at Fairfax. She was responsible for purging the staff at the news company in a restructuring exercise. The person who appointed her, David Kirk subsequently was appointed to the board of Forsyth Barr. Ms Withers had previously held a top executive job at the Radio Network but for no obvious reason that job had come to an end. It is most unusual for a director of a good range of companies to want to become an executive again. She has expressed little remorse for deserting the Feltex subscribers in their hour of need. She could no doubt have quit Auckland Airport instead of Feltex. The subscribers to the Feltex IPO had a right to think that she would stay with them longer than she did. The logical answer is that the Fairfax appointment was a jack-up to get her out of Feltex and get rid of anyone in Fairfax who might expose the scam. When she eventually left Fairfax senior appointments to Government Boards were made available to her. She now chairs Mighty River Power and is deputy chair of TVNZ, as well as chairing Auckland Airport.

Tim Saunders the Feltex chairman was dumped from the board of Contact Energy, the non-Government controlled electricity generator, once the failure of Feltex became public. Fellow Feltex director at the time of the IPO, Joan Withers, although not involved in the electricity sector at that time got appointed to the Mighty River board and became its chairperson. The difference is Withers was engaged to do Government work in robbing the Feltex subscribers and so was appropriately rewarded.

. 6 The Feltex IPO was unreasonable with respect to its handling of assumptions as to market size and market share. On page 37 of the prospectus it showed a graph of the size of Feltex's Australian market for the years 1993 to 2003 In a sentence above the graph it said the market had grown 1.7% p.a. compounding in that time. Feltex had used only the market sizes for the two years 1993 and 2003 in making this calculation. On page 91 they said that the 1% p.a. growth they had adopted for their income projections for 2005 "which was below the average growth rate of the past 10 years". It can reasonable be assumed that it was the page 37 data they were referring to. As well as ignoring the figures for 1994 to 2002 their 1.7% calculation included 1993 which was outside the "past 10 years". Using the forecast function on Microsoft Excel and the data for the past 10 years the trend prediction for 2005 is 3% less than the figure for 2003 not the 3.4% greater that Feltex have calculated. The 6.4% difference represents about $20m of revenue a large amount of which would be profit.

With respect to market share Feltex have not referred to this parameter in its recent past. It can be calculated that they were losing share at the rate of 5% p.a. This 1% increase assumption is quite unreasonable but the Government appointed Securities Commission has failed to recognise this or the deceptive "less than the average growth of the past 10 years" statement with respect to market size. In the Commission's one page statement of its unannounced investigation it said that it would be taking no further action concerning the IPO. It defied that statement about a year later when it devoted about 3 pages of another report to the IPO. And according to the Commission Feltex auditors and directors just happened to make bad errors of judgment after Ms Withers left the company but did nothing obviously wrong with the IPO.

7 The Securities Commission quorum for the Feltex IPO consisted of four members, all female. The Commission at that time had a total of 10 members, 5 of each gender, as was the case in April 2011 when it closes down to be replaced by the newly established Financial Markets Authority, which starts off with three female members out of a total of nine. The chairperson of the Commission, Jane Diplock, was on the quorum ruling on the Feltex IPO. She is from Australia as was and is one other quorum member, Keitha Dunstan. She had been given a position at Victoria University of Wellington, but like Diplock has now returned to Australia, their foul deeds done. Another member of the quorum, Joanna Perry, is also no longer on the Commission. She had followed Elizabeth Hickey in becoming chair of the Financial Reporting Standards Board. Elizabeth Hickey of course made two "unfortunate mistakes" as auditor to allow the Bank of New Zealand to report a $100m profit for 1990 when the profit was less than $35m. In 2010 Ms Perry was made a member of the NZ Order of Merit for her services to accounting. Ms Hickey got a similar honour but for services to netball. The fourth member of the Securities Commission quorum which "investigated” the Feltex IPO was Annabel Cotton. The Australian Securities and Exchange Commission has 7 members one of which is female.

8 Female Prime Minister Helen Clark's Labour party had won its second parliamentary election in late 2002 and in 2004 would be preparing for a hoped third win in 2005. Stacking the Securities Commission with people of "like mind" or prepared to be for due reward is likely to have been part of the strategy. "Dr" Mary Ann Thompson who became acting head of Helen Clark's prime minister's department and was said to have the ear of the prime minister was subsequently convicted of Phd fraud. This Prime Minister with certain of her ministers is likely to have been responsible for the four female Securities Commission for Feltex and for female judges presiding over the two Feltex Court cases.

9 NZ scored some "astounding " wins at the Athens Olympics, much of them centered around cycling, which is well recognised as having a drug cheating problem. Ms Ulmer won by 2 secs and there was the unusual sight of her being held on her bike while she agonisingly recovered her breathing. The event she won is no longer an Olympic event. It is probable that a secret branch of the Olympic Committee has a facility whereby a country buys an exemption from genuine drug and similar testing for certain events. It helps keep everybody happy no doubt. Corruption is not new to this organisation. Tyler Hamilton of USA has in May 2011 handed in his gold medal for cycling at the Athens in 2004, confessing we think to EPO use. Lance Armstrong was at his prime about that time but his “achievements” have all been discredited. About the same time Ms Ulmer has been appointed a cycleways ambassador. Prime Minister John Key has in 2012 chosen her to be a guest on his radio show.

10 During the Feltex collapse the Shareholders Assn under Bruce Sheppard made a big noise and took token action against the directors but Mr Sheppard then changed tack and was apparently instrumental in getting MacDonald Vague appointed as liquidators. These liquidators purported to spend a lot of public money investigating the IPO but found nothing wrong "out of respect for the Securities Commission". They were suing the directors for matters other than the faults the Commission found (as well as those faults) but strangely enough also only for things that happened after Ms Withers left. There action has now been settled with minimal benefit obtained. The liquidators refused to give access to the share register to a member of the public despite an obligation to do so.

The liquidators have however now taken action against the Feltex auditors, Ernst and Young, concerning the 2005/2006 accounts. The judgment in MED V Feeney found fault with the auditors but they were not a party charged in this case.

Mr Gavigan is leading a shareholders action against those responsible for the IPO but seems to be going no-where. He keeps changing witnesses and legal people. His action is consistent with channeling shareholder energies into a losing action, as an agent of the instigators of the IPO. He is a former Fay Richwhite executive.

11 The worst part of the scandal is the appalling collapse of market confidence as regulators are appointed not to project firm consistent regulation but to ensure that the corrupt Feltex IPO dealings are covered up. Kevin Simpkins who was "retained" by the Securities Commission to "report" on Feltex has been made chairman of the Accounting Standards Review Board which is about to take over accounting and audit regulation from the Institute of Chartered Accountants. He has come from South Africa in the early 1990s as has Feltex's Chief Financial Officer, Des Tolan and Feltex' chairman at the time of the IPO, Tim Saunders. The regime they come from was all about misleading the population to retain white power. The only two accountants on the board establishing the Financial Markets Authority, replacing the Securities Commission and a few other agencies, are Bruce Sheppard and Scott St John, managing director of First NZ Capital the other joint lead broker of the Feltex IPO and close associate of the vendor and promoter of that issue.

12 The action against five Feltex directors concerning Feltex's six monthly report to 31 Dec 2005 is something of a circus. The companies office did not appeal the decision which talks about not a skerrick of evidence and them being all honest men, but is appealing the costs awarded to the defendants which appears to be fully consistent with the judgment. The judgment says these directors were entitled to rely on advice from Ernst and Young who were the company's auditors and reviewers, but they were not. The company system relies on there being two sets of expertise, that obtained from a source other than the auditors or reviewers and adopted by the directors, and that of the auditors or reviewers.

13 The Financial Markets Authority, which took over from the Securities Commission on 1 May 2011 is acting like a replacement organisation rather than the same organisation with a new name. It has dropped almost all historic Securities Commission information, going back to 1980, from its web site. Its attitude is clearly "let's start again" which is typical for an organisation who's objective is to cover up wrongdoing. The Institute of Chartered Accountants similarly took over from the Society of Accountants in the mid 1990s. Complaints about any wrongdoing by accountants during the Society's tenure had to be made within one year of the Institute's takeover when the Society completely closed down. Of course it can take many years before an accountant's misconduct becomes apparent. Now the Institute likes to see that changeover as being simply a name change so that it can present a "fine tradition" of continuous service.

14 The scandal has assumed a manslaughter dimension with the deaths of Paul Phillip Wilson aged 21 at Easter 2011 and David Gaynor, aged 17, a few months later. Both appear to have died of self harm following alcohol or illicit drug taking. Phillip's mother was Marketing Manager at Feltex during the IPO while David's father has written extensively on Feltex and on the Securities Commission for the New Zealand Herald. Both these parents have no doubt been pressured into going along with huge lies contained in the IPO prospectus which no doubt has badly distorted their personality and hence parenting ability.

15 The Commerce and Justice portfolios of the Government have been mostly involved with this operation. The Labour Commerce minister was rumoured to have suffered mental depression while its Justice minister was relieved of the post to become parliamentary speaker. The one minister, ranking No 4 in the cabinet, had both portfolios during the first term of the National lead Government from late 2008, but he has "surprisingly" given up politics and gone to work for a bank. The new Commerce Minister from late 2010 (ranked 19), Craig Foss, worked as a trader for the Bank of New Zealand during its controversial "mixed ownership" years of 1985 to 1993. During this period the bank over borrowed heavily and had to be twice bailed out by the Government to the total tune of $1b+. In 1990 of course it declared a $100m profit which did not exist. This was investigated by the Government appointed Securities Commission which found all the practices used to create the profit to be unacceptable but found that nobody had wilfully done anything wrong, if it is possible to believe that. Mr Foss then moved overseas to become a trader and securities officer with the Swiss based financial multinational Credit Suisse. Mr Foss moved back to New Zealand in preparation to becoming a National MP in Hawkes Bay, about the time of the Feltex IPO of which Credit Suisse organisations were the vendor and promoter.

16 The corrupt audit firm Ernst and Young has played a big part in this scandal. It "audited" the Bank of New Zealand in 1990 and also Feltex Carpets. One of its auditors, Gordon Fulton was censured by the NZ Institute of Chartered Accountants over events subsequent to the IPO after a week long hearing. While Feltex was making reduced profit announcements in 2005 and everyone on the outside was wondering how long it might be before its bank appointed a receiver, Mr Fulton, on the inside, purports to have been of the opinion that Feltex would never allow this to happen. He knew that Feltex was having a meeting with its bank in September 2005, seeking to increase the borrowiing facility. He knew Feltex was likely to breach its banking covenants if these covenants were not altered but somehow "thought" that Feltex would lay down the law and maintain its independence, so much so that he did not bother to take a look at the amended agreement.

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