Wellington, Oct 9 NZPA - The Serious Fraud Office has launched an investigation into collapsed clothing manufacturer Lane Walker Rudkin Industries (LWR) after the receiver referred a matter to it.

The LWR group of companies collapsed in April owing Westpac $120 million. The company is owned by businessman Ken Anderson.

The National Distribution Union has also called for an investigation into the failure of the iconic company. More than 200 workers lost their jobs.

Receivers Stephen Tubbs and Brian Mayo Smith of BDO alleged that LWR mis-represented its financial strength to Westpac in order to borrow money from the bank.

If Westpac had known the true position it would not have lent so much.

SFO chief executive Grant Liddell said that information provided by the receivers in their complaint enabled him to decide that a investigation under part two of the Serious Fraud Office Act was warranted.

He would not make the reasons for the decision public.

The investigation was in its early stages and Mr Liddell could not say how long it would take, beyond saying that it would be several months. The company's former employees include Prime Minister John Key. NZPA