10 July 2003 Media Statement

Government steps in on dodgy investment scheme

Three Tauranga-based corporations and three individuals were placed into statutory management following an urgent meeting of government ministers last week, said Commerce Minister Lianne Dalziel.

The statutory management applies to Tauranga-based corporations Asset Protection, International Investment Unit Trust, Timberland Trust, as well as associated persons, Donald Moris Rea, Catherine Linda Trezona and Lisa Shirlee Talbot.

The government’s action follows advice from the Securities Commission.

“The Securities Commission advised that these corporations and associated persons appear to have been involved in illegal raising of funds in schemes similar to prime bank instrument schemes , which promise substantial returns on fake investments. Such schemes are a scam, as the investments do not exist. Promoters take the funds from the pyramid-like scheme and money from new investors continues to be used to repay old investors until the source of new investors dries up, similar to a ‘Ponzi ’ scheme.

“Statutory management was necessary to protect the assets of the companies and the associated individuals, while the scheme itself is investigated. Notice of the statutory management was served yesterday, and all known bank accounts have been frozen,” Lianne Dalziel said.

Lianne Dalziel is urging anyone who has invested in a scheme promoted by the named corporations or associated persons, to come forward and contact the statutory manager. We need to know the extent of the problem,” Lianne Dalziel said.

“There are two guiding principles that I would like to offer potential investors in these types of schemes:

- “If it sounds too good to be true, it is.
- The higher the promised return, the greater the actual risk.

“This situation highlights again the need for people to be cautious and to seek independent advice before making investments especially when you have little or no experience.
“There is no guarantee that people who invested in these schemes will get their money back however, statutory management is the best mechanism for preserving the status quo while investigations proceed,” said Lianne Dalziel.

John Waller and Richard Agnew, from PricewaterhouseCoopers in Auckland have been appointed statutory managers.

“This decision is not related to recent actions taken with respect to so-called ‘buy-back’ schemes. It is co-incidental that statutory management powers, which have not been exercised for four years, have been used twice in the past four weeks,” Lianne Dalziel said.

ENDS

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