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Audit firm BDO Spicers has agreed to an $18.5 million settlement of a claim against it from the liquidator of failed lender Capital + Merchant Finance.
The agreement is a full and final settlement of claims relating to the audits of the company's 2006 and 2007 financial statements without an admission of liability on the part of auditor BDO, according to a statement by the Insolvency and Trustee Service, a business unit of the Ministry of Business Innovation and Employment. Capital + Merchant was placed into liquidation under the control of the Official Assignee in December 2009 after collapsing in 2007 owing some $167.1 million to about 7,500 investors.
In a statement of claim seeking unspecified damages plus interest and costs the Official Assignee argued BDO failed to ensure the company's accounts and prospectuses presented a true and fair view of its financial health and BDO denied the claim.
Three former directors of Capital + Merchant Finance were sentenced to prison terms in the Auckland High Court in 2012. Two were ordered to pay reparation totalling $160,000.
Receivers Grant Graham and Brendon Gibson of KordaMentha are suing Perpetual Trust, claiming the trustee breached its duty to Capital + Merchant investors.