Promotion of Accounting Reform as the most effective Pathway to a Fairer Safer and more Prosperous Society. Comment and Support from all quarters is Sought to straighten out NZ's problem

To Contact Us
To page back through previous editions click here Index is in right hand column

August 2021 Edition

We respend to some poor recent media treatment on the “Cullen” legacy”.

Your political commentator tribute to Michael Cullen on Monday 23 Aug  was grossly over-generous.

At the height of his political career he "reminded" the public and  indeed the Queen of the Queen's visit to New Zealand as  Princess Elizabeth ie before coming Queen. It apparently didn't arouse his curiosity as to just when this happened eg was it by aircraft or ship? Were other countries visited along the way or was it an NZ special? It would seem that this speech has now been suppressed.

The Clark Government, of which Cullen was a major player, was a very corrupt Government, especially with regard to the country winning Olympic medals by use of drugs and stolen funds, and similarly paying for the country being top TI anti corruption index. .  This involved the setting up of a crooked Securities Commission, and a crooked "Cullen Fund" which secretly contributed to these projects by "accidentally" losing money in" unfortunate" investments. This fund and the ACC one and most Government departments invariably are audited by Ernst and Young, an organisation with USA links which knows how to keep in with crooked Governments.

Two Australian women were appointed to The Securities Commission about 2002, one Diplock becoming its chair. These two were part of a four women quorum of the Commission who fraudulently said they investigated the Feltex Carpets IPO and found nothing materially wrong with it.  For a start it was claimed on page 37 of the prospectus that sizes of the Australian Carpet market had grown by 1.7% p.a. over the 11 years shown in a graph of such sizes (attached.)

The sizes of only 2 of those years (1993 and 2003) were used in making that calculation. Feltex says it adopted 1% growth in projecting its results for the 2005 year claiming this 1% growth was less than its annual growth for the past 10 years. Using least squares regression analysis on the 10 most recent gives 0.36 % growth and a size for year 2005 which is 3% below the actual 2003 size not 1% (or 2%) above it as Feltex adopted. Further the pattern of the sizes indicates a fall-offf in sizes after a large size has been achieve ie there was a fall of 9% from the largest size, year 2000 to 2002, and a 5% fall from the 3rd highest size in 1995 to 1997. That would suggest the a 7% fall from 2003 to 2005 should have been allowed for. Feltex also adopted a 1 % increase in market share but did not disclose market share changes in previous years. There was a 14% drop in revenue in the 2005 year which crippled the company given that it had to pay promised dividends or the subscribed funds would have to be returned.

The appointment of Australian females to critical positions from a standpoint of corruption continues, such appointments having been made for the CEO of the Serious Fraud Office and as Secretary of the Treasury which was at least the most senior Public Service position. There was a law brought in that local authority accountants had to declare all donations to their campaign funds over $1000 but the SFO understandably thought several breaches by Lianne Dalziel, the Commerce Minister in the lead up to the Feltex IPO did not warrant any conviction or punishment. She somehow was not the sort of person that that law should apply to. .

The Securities Commission was said to be advised by one Kevin Simpkins on the Feltex Carpets affair. Simpkins was trained as an accountant under the white South African regime which no doubt was keen to twink financial performance indicators,   He migrated to NZ, I think for his corruption skills, and after the Feltex job became I think CEO of the External Reporting Board. He died in 2015 aged 57. A successor as chair of the ERB, Tony Dale died the same year aged 55. Graham Crombie the president of the NZ Accountant's Institute at the time of the Securities Commission report on the Feltex IPO died in 2019 aged 50 and Craig Norgate a committee member of the Institute around that time died in 2015 aged 50. And David Gaynor died of self inflicted injuries in 2011 aged 17, hours after being the guest of Norgate along with others at the Institute's Auckland headquarters .  Also Paul Phillip Wilson died at Easter 2011 of reckless driving probably wilful. Paul was aged 14 when his mother who is mentioned in the prospectus as a Feltex marketing manager would have been forced to accept crooked data such  as I have outlined above which would have hurt her greatly with grave consequences for Paul.

As well as Simpkins two other people trained in the white South African regime have been used in the Feltex scam. Des Tolan joined Feltex as an accountant in 2003, and Tim Saunders became Chairman of the Board in year 2000. 

It is clear that the Cullen Fund has been established with misuse of public funds in mind. I was concerned about the background of many of its staff when I looked at it a few years after its inception. I reported this on my web site and promptly staff details on the Funds web site were reduced considerably. Then the Fund’s CEO Paul Costello resigned and returned to Australia. Family reasons were cited. Costello had been a Hutt Valley secondary school teacher into his 30s when to the surprise of his colleagues he resigned and took off to Australia to go into the Superannuation industry. He died in 2018 aged about 61.. His early thirties would be about 1988 when the previous Labour Government which also included Cullen, was in power. I suspect Paul was a relation of Peter Costello the Australian Treasurer although not his brother. They were born at a similar time.. Australia has obviously been assisting NZ to develop a corrupt Olympic medal hungry regime similar to its own On Paul's departure from the NZ Superannuation , one Adrian Orr was appointed. He demoted Paul Dyer from the Chief Investment Officer position saying he was not going to appoint another CIO. Dyer drifted off to the ACC investment fund where I understand he is now its CIO.  I did not notice that one Matt Whineray was appointed to the Superannuation Fund staff at that time. He and his brother Fraser were both employed by Credit Suisse around year 2000. Credit Suisse were heavily involved in the Feltex IPO and in an exercise where the ACC lost half a million dollars by selling National Mail share to businessman Cliff Cook a week or so before ACC said it was going out of the mail business. In mid 2014 Matt Whineray was promoted to the vacant CIO position at the Superannuation Fund and at the same time the fund purported to deposit US$150m in a private Portuguese Bank which effectively was declared bust about a month later. This "deposit" was purported to be part of a $US600m Oak Investments consortium "managed" by Goodman Sachs. There were 11 other depositors in this group. One was a Danish Superannuation Fund. Denmark rivals NZ at the top of the IT anti-corruption index and in Olympic medals per capita. The other ten were companies register in small countries recognised as tax havens. NZ had been doing a lot of work for such companies at that time. Orr claimed the Portuguese reserve bank let them down and the Oak group purported to take legal action against this bank which has now been dropped.

The nationalism associated with Olympic medal winning is most unhealthy and has just recently killed an athlete.

This is the Cullen legacy..          

to top of page v

Advertising section

We link to: Accounting Page - Comprehensive Accounting Resources and Directory.

Internet Web Directory - The internet's fastest growing directory of the best web sites. Fully searchable and updated regularly.
We Advertise:

Garden tools

Case studies of ICANZ coverups

1 ACC Annual Accounts

2 Ernst and Young report to Dairy Co shareholders

The scandalous Audit Cert of the 1990 BNZ annual accounts - Take a Look from Here And then learn about the Securities Commission here who reported on the affair. We also background the role of the Institute of Chartered Accountants of NZ in ignoring the affair. It might go back 10 years but many players still maintain high office, collectivly protecting themselves at the expense of others.

Structure and Operation of an alternative Accounting Organisation designed to shun dishonesty.

Suitable Objectives
Register of Members
Members Forum - Topical
* open to all meantime:
Plenty of Opinion
Magazine Plans
Need an Accountant?
or Prepared to Change?
Users Forum
* have your say
Ready to Join?
Offering some Help?
Knowledge Tests
* being developed
Information Bulletins

Why it is being Proposed

What's Wrong with
the existing 
accounting body?
So called BNZ Audit
an extensive case study
Current Attitudes of Existing Institute

Visit our Advertising page from