Former CERA employees under SFO probe


The actions of two former Canterbury Earthquake Recovery Authority employees will be referred to the Serious Fraud Office, the state services commission says.

Gerard Gallagher, Simon Nikoloff and Murray Cleverley were investigated by solicitor-general Michael Heron QC after allegations of conflicts of interest and personal gain when they were CERA employees was raised in the media, it was announced on Tuesday.

Following CERA's disestablishment in 2015, Mr Gallagher and Mr Nikoloff moved into roles with crown company Otakaro Ltd.

Mr Heron's investigation focused on the activities of the two men with company Property and Investment Management Ltd relating to a property at 273 Manchester St and in the case of Mr Cleverley, the Canterbury District Health Board property at 32 Oxford Tce.

"New Zealanders need to have confidence that public servants work to the highest standards of integrity in everything they do," State Services Commissioner Peter Hughes says.

"It is completely unacceptable for any public servant to try to use their official position for personal gain.

"I consider their actions to be serious misconduct [and] if these two individuals [Mr Gallagher and Mr Nikoloff] were still employed by CERA I believe there would be strong grounds for terminating their employment."

Mr Heron said parties dealing with Mr Gallagher and Mr Nikoloff over the Manchester St address believed they were dealing with CERA employees.

Mr Hughes said he had referred the actions of the duo to the serious fraud office to consider whether it was of potentially criminal nature.

Mr Cleverley was not involved in the other two men's business operations but should have shown better care and judgement, Mr Hughes said.

The investigation cost about $140,000.

Mr Cleverley resigned on Tuesday from his position as chairman of the Canterbury and South Canterbury district health boards.