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Key's lawyer helped set up `sham' trust

NZ NewswireNZ Newswire 4/05/2016
Prime Minister John Key © Getty Prime Minister John Key

Prime Minister John Key's private lawyer, Ken Whitney, was involved in setting up a blind trust described by a High Court judge as a sham, it's been revealed.

Fairfax reports the trust allowed Las Vegas-based New Zealander Rod Nielsen to take part in a failed Auckland property project which owes investors $16 million, and is under investigation by the Serious Fraud Office.

Questioned about this on Wednesday, Mr Key said he had complete faith in Mr Whitney.

"I don't know any of those details but in his dealings with me for a very long time he's been thoroughly ethical," Mr Key told reporters.

"I've known him for a long period of time and I have complete confidence in him."

Mr Whitney is in the news because he runs a company, Antipodes, which specialises in setting up foreign trusts.

There's been intense scrutiny of foreign trusts around the world following the leak of millions of documents from Panama-based law firm Mossack Fonseca, which sets them up.

The trusts are legal but can be used to hide wealth from tax authorities, or to launder money.

In 2014 Mr Whitney lobbied against the IRD tightening the rules around trusts, and the review was dropped.

Mr Key has denied having anything to do with that.

Fairfax reports that in 2014, Mr Nielsen's Rosebud Corporate Trustees company brought a claim to the High Court in Auckland, seeking buy-out payments from former partners in the Albany Heights development.

Mr Nielsen was one of four men involved in a syndicate that advertised heavily in Asia to raise funds to build properties on Auckland's North Shore.

In the ruling, Justice Edwin Wylie concluded: "In my judgment, the Rosebud Trust was a sham trust from the outset.

"The intention from the outset was to mislead, to conceal Mr Nielsen's identity and to enable him to carry on business in this country, notwithstanding his bankruptcy."

Fairfax reports Mr Whitney has not responded to emails and phone calls seeking comment about his involvement with Mr Nielsen.

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