Capital + Merchant Finance directors jailed

Neal Nicholls (centre) and Wayne Douglas in court (courtesy 3News)

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Three directors of Capital + Merchant Finance were jailed today.

Neal Medhurst Nicholls (56) and Wayne Leslie Douglas (58) were both sentenced to seven and a half years' imprisonment.

Owen Francis Tallentire (65), the firm's boss, was sentenced to five year's jail.

Justice Ed Wylie delivered the sentence at Auckland High Court this afternoon.

The trio were found guilty in July of fraud charges brought by the Serious Fraud Office after what was described as one of the most complicated finance company trials seen in this country.

The fraud charges they faced under the Crimes Act related to $28 million worth of property and investment loans advanced by Capital and Merchant Finance between 2005 and 2006.

Douglas and Nicholls were found guilty of all three of the theft charges they jointly faced. Tallentire, the firm’s boss, was found guilty of two.

The trio have been in jail, awaiting sentencing, since Justice Wylie delivered the guilty verdict on July 19.

SFO chief executive Adam Feeley said the $167.1 million collapse of Capital + Merchant represented some of the worst excesses of the finance companies.

“These sentences support that point of view.  They will send a strong message to the commercial sector regarding the severity of punishment that will follow cynical crimes of these kind.”

The SFO is seeking to appeal not guilty verdicts against Nicholls and Douglas from a separate Capital + Merchant trial in April-May.

These relate to the non-disclosure of alleged related party lending totalling approximately $14.4 million.

Capital + Merchant Finance owed $167.1 million to about 7500 investors when it was placed in receivership in November 2007 – an average of about $22,280 per investor. Recoveries are unlikely.

By comparison, Bridgecorp owed $559 million to about 14,500 investors, Nathans Finance owed about $174 million to some 7000 investors and Lombard owed $127 million to 44,000 investors.


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11 Comments & Questions

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Wow 7 years. If you extrapolate the chaps at SCF who lost 10 times that could be breaking rocks for even longer.

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Let's all hope Doug Somers-Edgar pays attention to this - he is next on the list. 7000 FirstStep investors will get justice eventually.

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Where were the auditors and Board? It must have been a very very sneaky ruse to have snuck that much cashola out right from under the noses of the paid watchdogs.

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Jailing the directors cannot be the end of this disgraceful saga.

C&M extracted hundreds of millions of $$ from investors via financial advisors and advisory firms(ASB Securities was a prime example) - promoting their property backed book and insurance guarantee.

Who was supposed to check the veracity of C&M claims?

The Advisors?
The Auditors?
The Securities Commission?
The Trustee?

Seems to me that all the above are culpable in one form or the other.

Justice is not yet done until such time as those who were duped into putting their funds into C&M are provided with recourse against those :

1. Who advised them to put their money with C&M,
2. Who were supposed to keep an eye on their investments.

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Will Mr Hotchin be joining them?

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I have trouble understanding how anyone would have given these roosters their savings. Can someone tell me who was the trustee? Same as Hanover and SCF? Did all the directors and shareholders participate in this lollie scramble at the expense of the granny investors?

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http://www.stuff.co.nz/business/money/7059825/Trustee-ok-with-director-d...

Perpetual Trustee - a subsidiary of PGC.

Was also trustee for Nathan Finance, Strategic Finance, St Laurence, Hanover Capital, United Finance, Provincial Finance, etc.

Note that Perpetual was also involved in the recent infamous PGC/Torchlight/Mortgage Fund related party lending saga - shows glaringly that they have learnt nothing. As incompetent and as dumb as ever.

http://www.nbr.co.nz/article/related-party-loan-scandal-end-road-kerr-gb...

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Thanks

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Why has mr Nicholls been able to keep his assets which include the $2m odd he sold the Omaha property for which according to the judge he never paid for? His lawyer told the court that he had no assets! This is Bull sh*t. He has the funds somewhere and it should be paid back to investors, many like me are seriously out of pocket.He has a couple of companies still operating and whilst he's locked up his accountant is paying his bills. How does this happen. If Hotchen has his assets frozen without a charge how come convicted criminals like Nicholls and Douglas can keep their assets?the system is stuffed. Someone needs to get this out in the open. Douglas and Nicholls are just bloody thiefs, and deserve the 7.5 years.

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I totally agree. It seems crazy to just say they have no way of repaying any of the money to investors and manage to keep all their assets. Their families will continue to live the high life whilst they are inside!!

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Why did you invest in Finance companies in the first place..... because you were GREEDY Learn to live with it !!!!!

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