Former Seven exec in $8m fraud scandal

Billionaire Kerry Stokes says he’s “watching the till” at Seven West Media, as fraud allegations emerge.

Seven West Media chairman Kerry Stokes.

Billionaire Kerry Stokes declared yesterday he was “watching the till” at Seven West Media.

But over 14 years, Seven’s commercial director of programming John Fitzgerald is alleged to have stolen $8.02 million from the company’s coffers by creating and paying fictitious invoices to his private companies.

The alleged theft only ended in April last year, despite Mr Stokes and his chief financial officer Warwick Lynch declaring yesterday that the company did not have a corporate governance problem.

NSW Supreme Court documents reveal that the alleged theft was only possible because Mr Fitzgerald was able to both create and authorise invoices without the need for a second signature, contrary to best practice.

Seven closed the loophole in the Finance One system on March 15 last year, after the fraud had been detected.

Mr Fitzgerald also allegedly used the scanned signature of Seven’s head of design, Gabrielle Christie, on invoices raised by his companies, FPC and Kanfit, in February last year.

Documents show Mr Fitzgerald has already repaid $2.34m to the Stokes empire, and $3.71m from the sale of properties in Cattai and Dee Why has been frozen. Seven is also seeking to put its foot on a third property in Terrigal.

Mr Fitzgerald admitted some of the conduct but denied it amounted to fraud. His alleged fraud was uncovered as he was assisting with the investigation of “a number of suspicious purchase requisitions unrelated to these proceedings”, Justice Francois Kunc said in a ruling freezing his assets in April last year.

Seven is also probing financial irregularities in its Los Angeles office, which buys US TV content for the Australian broadcaster.

Seven has also accused Mr Worner’s former lover, Amber Harrison, of running up personal expenses on her corporate card during while working as executive assistant to magazine boss Nick Chan.

“I can assure you I watch the till,” Mr Stokes told the market yesterday. “We’ve had some changes in systems, some new approaches that caught some of these issues.”

Mr Lynch said Seven had “increased our internal audit resources and reviews over the past number of years, together with improved system controls”.

Asked if this meant the systems had previously not been up to scratch, Mr Stokes said: “No.”