Capital + Merchant directors face more fraud charges

Capital + Merchant directors face more fraud charges

July 13 (BusinessDesk) – The directors of failed financier Capital + Merchant Finance Ltd. face a further 11 charges from the Serious Fraud Office over $28 million of transactions between 2004 and 2006.

The white-collar crime investigator alleges the deals breached restrictions in the lender’s trust deed and resulted in trusts controlled by Neal Nicholls, Wayne Douglas, and Owen Tallentire benefiting by some $15.9 million.

“Confidence in the integrity of our financial markets will not be restored unless New Zealand investors believe there have been thorough investigations and, where appropriate, serious criminal charges laid against those responsible for the collapse of the finance companies,” acting director Simon McArley said in a statement.

In December, the SFO laid initial charges against founders Nicholls and Douglas over misusing some $14.5 million of funds raised to convert two Palmerston North office blocks into student accommodation.

The SFO was called in to probe the lender’s books in March by first receiver Grant Thornton, which is acting for prior ranked creditor Fortress Credit. The Capital + Merchant group of companies called in the receivers in November 2007 owing some 7,000 investors about $167.1 million, and was put into liquidation in December 2009.

Nicholls, Tallentire and other C+MF directors Colin Ryan, and Robert Sutherland face criminal charges and civil proceedings from the Financial Markets Authority, formerly the Securities Commission, over the way they promoted their debenture stock to investors. Douglas only faces criminal charges from the commission.

The SFO has laid criminal charges against people involved in a number of well-publicised finance company failures, including National Finance, Bridgecorp, Five Star Finance.

(BusinessDesk)

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