The Financial Markets Authority has filed charges against five finance company directors and withdrawn charges against one other who died suddenly.
Nick Wevers died in Auckland this week.
The FMA had filed charges against him in connection to the collapse of Viaduct Capital, a finance company that got booted out of the Crown Retail Deposit Guarantee Scheme in 2009 for breaching related party lending rules.
In a statement this afternoon, the FMA simply said Mr Wevers has passed away and the charges against him have been withdrawn.
A spokesman is responding to NBR requests for more information.
Five other businessmen are due to appear in the Auckland District Court on May 7 on various charges relating to Viaduct Capital and Mutual Finance.
Those charged are former Strategic Finance founder Paul Bublitz, Bruce McKay and Richard Tim Blackwood for their roles at both companies, Lance Morrison for his role at Mutual and another person who is seeking name suppression.
The defendants have been charged with theft in a special relationship under section 220 of the Crimes Act and making false statements in a prospectus under section 242 of the Crimes Act. These charges carry maximum sentences of seven and 10 years' imprisonment.
In relation to Viaduct, charges have also been filed under section 377 of the Companies Act in respect of false statements made to Viaduct's trustee, which carries a maximum sentence of 5 years' imprisonment or a $200,000 fine
Mutual Finance collapsed in July 2010 owing about 340 investors about $9.3 million, $9 million of which was covered by the government's retail deposit guarantee. The Crown has been repaid about $1.8 million, with another $1.2 million in cash held by receivers Brendon Gibson and Grant Graham of KordaMentha, which is subject to a dispute from another party, according to their latest report.
The financier's dealings were looked at by the Serious Fraud Office, which decided not to pursue a prosecution. It instead passed on information to the FMA over its relationship with related failed lender Viaduct Capital.
Viaduct called in the receivers two months before Mutual, owing 110 investors some $7.8 million, of which $7.5 million was guaranteed. Receivers Boris van Delden and Iain McLennan of McDonald Vague estimated a return to depositors of between 20c and 27c in the dollar, according to their last update in November.
Mutual had prior ranking over Viaduct's securities in exchange for further funding in "security sharing deeds"; its validity was something receivers van Delden and McLennan sought legal advice over, according to their first report in August 2010.
Viaduct fell foul of the government in 2009 when the Treasury asserted it failed to comply with rules on related-party lending and general business conduct by not undertaking due diligence on loans from Hunter Capital Group.
Hunter's Bublitz lent cash to Viaduct's shareholder, Phoenix Finance Holdings, after he had been engaged to source lending opportunities for the finance company. When the guarantee was stripped, the firm held about $14 million of deposits.
Viaduct's then chief executive Nick Wevers subsequently quit the firm, and McKay and Blackwood took over the management. Bublitz went on to take full control of Mutual.
Wevers had a background in property-related investment as chief executive of Capital Properties until 1998, retirement home operator ING Real Living, director of listed Kermadec Property Fund, and chief executive of Blue Chip for a brief period in 2004 before leaving after a spat with founder Mark Bryers.
The ink was hardly dry on the Treasury's signing of the deposit guarantees on November 13 when Viaduct issued a prospectus seeking up to $50 million in deposits returning between 7.4% and just under 8%.
"I'm entering the finance market because there's a huge gap as banks refuse to lend or tighten up their criteria so much that there is virtually no lending," Wevers told NBR at the time.
"We started looking for an acquisition before Christmas after the guaranteed deposit came in. We wouldn't have done it if we couldn't find a company with the government guarantee.”
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Rob Hosking discusses what John Key needs to do to shut down critics
- MYOB's CEO Tim Reed and executive James Scollay talk about growth and competition
- Nevil Gibson discusses Amazon's expansion into bookstores in his latest Editor's Insight
- Croxley chief executive David Lilburne on his company's new head office
- Matthew Hooton discusses Labour's extreme left takeover