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December 2004 Edition ----to page back through Previous Editions click here

The last month has seen the "coming out" of the apparent Group Financial Controller of Telecom New Zealand, Peter Garty. Telecom have not seen fit list this seemingly high ranking individual in their annual report and the only reference to it on the internet was temporarily when he addressed an Institute of Chartered Accountants branch on sustainability accounting or some such and probably got accidentally exposed.

But on Friday Nov 26 2004, the Dominion Post on page C4 produced almost a third of a page on the subject of Enron and how it is supposed to have effected New Zealand accounting. (about one third of the page was a picture of the KPMG chairman Allan Issac in opulent surroundings and almost a third at the bottom was ads) The message was that the Enron case demonstrated that the poor old auditor could get into trouble, hence they needed to be paid quite a lot more to cover this new found random risk of being asked to account by way of a prosecution as befell Anderson. Some auditors have even got to the stage of looking over accounts before signing them off it was. sort of rumoured. Mr Garty was one of several high profile accountants interviewed, with his professional position duly stated

This site seeks to have him "go back in", preferably to a tough gaol.

Here is a brief restated appraisal of Mr Garty's credentials for infamy.

Mr Garty was a leading participant in NZ's Enron whereby long term zero coupon bonds were dressed up as an insurance policy and otherwise had their income misapplied to overstate the income of the Bank of New Zealand in 1990 by about $60m.

Mr Garty was the assigned audit partner who issued an unqualified Audit Report for these BNZ accounts. He professed to have always believed that the "insurance policy" was valid although Elizabeth Hickey, the firm's Senior Technical Advisor, assigned to assist him especially in relation to this "policy" controversy, apparently over-ruled him in finding there had been a $27m profit overstatement and entering it on an Unders and Overs schedule. Mr Garty's response was to "find" about seven items of profit understatement to offset the $27m and justify the unqualified report. The Securities Commission, investigating in 1993, was not able to substantiate any of these understatement items and found further overstatement Items. It found consequent actions by Mr Garty in 1992 to be substandard and reported him to the Accountants Society.

The Dominion Post needs to do some investigation and not pander to this propaganda profession.