The Serious Fraud Office (SFO) has brought 82 criminal charges on retail gas supplier E-Gas Limited (E-Gas), following investigations.
Former Managing Director Ronald Peter Rosenberg (71) and former General Manager Sydney Lio Hunt (44) each face 41 charges under the Crimes Act relating to dishonest use of documents.
They are due to appear in the Wellington District Court on September 27.
If convicted, the charges would carry a maximum prison term of seven years.
The SFO alleged that between April 2005 and October 2008, Mr Rosenberg and Mr Hunt deliberately under-reported the quantity of gas supplied to its retail customers in order to obtain a pecuniary advantage.
The Office began its investigation as Part I inquiry in December 2010 and upgraded it to Part II investigation in February 2011.
According to the charges, E-Gas under-reported its gas consumption by approximately 950,000 gigajoules worth about $8.74 million and avoided penalties of about $8.67 million.
E-Gas was established in 2000 to supply gas to the retail market.
The SFO received a complaint in December 2010 about possible inaccuracies between the amounts of gas E-Gas supplied to its customers compared to the amount of gas reported used to gas wholesalers.
Under Gas Industry rules, retailers such as E-Gas are required to book in advance the amount of gas they expected to use in the ensuing year and are required to use the actual usage throughout that year by submitting data relating to the volume of gas retailers charged to their customers.
If the actual usage exceeded booked amounts, the retailer would be subject to penalties.
According to the SFO, persons in control of E-Gas deliberately under-reported the quantity of gas supplied by E-Gas to its retail customers and that they obtained a pecuniary advantage as a consequence.
In this case, the pecuniary advantage allegedly obtained includes gas sold but not paid for, and benefits in the form of avoided penalty payments.
SFO Chief Executive Adam Feeley said that his Office has been focusing on finance companies over the past few years.
“However, this case illustrates the diversity of other sectors we investigate, and companies need to be mindful that the risk of fraud exists in whatever industry they operate,” he said.
Source: A Serious Fraud Office Press Release
