Capital + Merchant trio deny multi-million dollar theft
A fraud trial of three Capital + Merchant Finance directors has started in Auckland High Court.
Wayne Leslie Douglas, Neal Medhurst Nicholls and Owen Francis Tallentire are facing three charges of theft under the Crimes Act, relating to $28 million worth of loans advanced by the financier between 2005 and 2006.
Messrs Nicholls and Tallentire also face a fourth charge, related to separate transactions referred to as the "Numeria" and "Clyde" transactions.
The Serious Fraud Office, which brought the charges, alleges trusts controlled by the director trio were the beneficieries of almost $16m, through related-party transactions.
Improper use of investor funds has been linked to loans of about $14.5m, advanced to three companies between April 2002 and September 2004, used to convert two Palmerston North office blocks to student accommodation, known as the Hub.
The men have also been accused of making false statements around related-party lending in Capital + Merchant Finance's June 2003-September 2004 prospectus and financial statements.
Messrs Douglas, Nicholls and Tallentire were in court and pleaded not guilty to all charges yesterday.
The trial, before Justice Ed Wylie, is expected to last five weeks.
Capital + Merchant, which offered property and investment loans, was placed into receivership in November 2007 owing about 7500 investors $167m.
The SFO began investigating CMF in March 2010 after a complaint from Capital + Merchant Finance receivers, Grant Thornton.
This trial follows the two-week trial of Messrs Douglas and Nicholls which finished on May 4.
The pair were charged with three Crimes Act charges.
The judge has reserved his decision and expects to release it after this second trial is completed.