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The Otago District Health Board's seventeen million dollar fraud scandal, has cost the chairman his job.
Health Minister Tony Ryall says he is holding Richard Thomson responsible and has sacked him.
However, the health boss says it's sending the wrong message.
"During Thomson's chairmanship, the largest fraud in New Zealand state services history was taking place at Otago DHB," says Ryall.
"This morning I telephoned Mr Thomson to tell him my decision."
Ryall says he had to have confidence that the board would operate both effectively and efficiently.
However Thomson says he inherited the problem, and simply sorted
it out, calling in the police.
"If you inherit something that started before you were even there,
and if you act on the first piece of information that's available
to you and you put a stop to it, you'll actually be held as
responsible as the criminals, and that tragically is a message to
staff, to sweep things under the carpet," says Thompson.
Thomson says the writing's been on the wall since he was summoned to a please explain by Ryall.
But the Minister says under National, health bosses will be held accountable.
Thompson says he and his board were re-elected by an Otago public who already knew the extent of the fraud and how it was being dealt with.
He thinks the Minister has misjudged public sentiment.
Current board member Errol Millar will take up the chairmanship and as an elected member, and Thomson will remain on the board.
Millar was appointed to the DHB in 2007 and also serves on the Southland DHB.
"The close working relationship between Otago and Southland DHBs will be further strengthened by Mr Millar's experience on both boards," Ryall says.
The DHB's former chief information officer Michael Swann and his friend and business associate Kerry Harford were found guilty in December last year of defrauding the board $16.9 million. The fraud happened over a period of six years.
Both are awaiting sentencing in the High Court next month.
The board also paid $1.3 million in legal fees and other expenses relating to the case, pushing the total cost up to $18.2 million.
The $1.3m comprised $890,000 in legal costs and $420,000 in other costs such as the detection, storage, security and valuation of the guilty pair's assets.
The figure included the cost of returning a yacht bought by Swann with his ill-gotten gains from Fiji to New Zealand.
Ryall had asked Thomson to resign over the fiasco, a request he refused.
A number of his fellow board members have backed Thomson saying attempts to remove him were unfair.
Thomson has also gained support from Labour's Dunedin North MP, Pete Hodgson who accused Ryall of political interference.
"Sacking the guy who helped catch the crook is nonsensical; therefore the conclusion must be that Mr Ryall wishes to install his own person to the job," Hodgson said recently.
"Most people will immediately see that Mr Ryall is using the fraud case as a pretext."
