Three directors of the defunct Capital + Finance Company will take the witness stand at the Auckland District Court to face a series of charges pressed against them by the Serious Fraud Office (SFO).
Neal Medhurst Nicholls (55), Wayne Leslie Douglas (57) and Owen Francis Tallentire (64) will face charges relating to transactions valued in excess of $28 million between 2004 and 2006, under the Crimes Act.
In its charge sheet, the SFO alleged that these transactions breached the restrictions contained in the Company’s Trust Deed, resulting in trusts controlled by the accused receiving benefits totalling approximately $15.9 million.
SFO Director Simon McArley said, “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 brought against those responsible for the collapse of the finance companies.”
When it went under receivership, the Company owed more than $165 million to about 7000 investors. Receiver Grant Thornton reportedly found irregularities and sounded the SFO. Investigation followed, leading to charges.
The SFO pressed charges in the first instance against Mr Nicholls and Mr Douglas under sections 220 and 242 of the Crimes Act in December 2010. They will appear in court in February 2012.
The charges related to alleged non-disclosure of related party lending (about $14.5 million) to a Palmerston North development called, ‘The Hub Properties’.
National Finance, Bridgecorp, Five Star Finance and Capital + Merchant are among the other companies that are currently under investigation.
Mr McArley said that every investigation into a finance company enables more resource to be allocated to the remaining cases.
He said SFO’s additional funding for 2011/12 would not help to conclude the investigations relating to the remaining four finance companies as a priority.
It would also secure SFO’s position to support other agencies with new investigations in the ensuing financial year.
The accused will appear in the Auckland District Court on August 5.