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Gold trader in liquidation as SFO swoops

The Serious Fraud Office has opened a formal investigation into an Auckland gold and precious metals trading company whose clients claim to have lost their funds.

Meanwhile, Grace Holdings, trading as BullionBuyer.co.nz, has been placed in liquidation as investors continue to search for answers.

Last week NBR reported the Fraser family of Christchurch said they had had been told the $350,000 they had invested with Bullion Buyer was gone.

The NZ Herald followed with a report suggesting complaints had been made to the SFO.

Grace Holdings’ sole director and shareholder Robert Kairua has gone to ground and is not returning calls.

Former director Simon Bratley, who resigned two weeks ago, is also not taking phone calls.

This morning SFO boss Adam Feeley said the media reports late last week of investors’ concerns about their investments had resulted in numerous other persons coming forward to contact the SFO.

”Since then, we have moved swiftly to assess these complaints, secure the company’s financial records, and make additional inquiries," Mr Feeley said in a statement.

"As a result we have concluded that there are reasonable grounds to believe that an offence of serious fraud may have been committed, and accordingly commenced a formal investigation under Part 2 of the SFO Act."

Mr Feeley said the agency’s priority was to make contact with as many investors as possible, and to coordinate their investigation with other agencies, which may have an interest in the matter.

In particular, the SFO said it was liaising with the Registrar of Companies to ensure that appropriate steps are taken to protect any funds for the benefit of creditors of the company.  

In a statement on its website Grace Holdings said Grant Reynolds of Reynolds and Associates has been appointed as liquidator.

“It is with regret that Grace Holdings New Zealand Limited trading as Bullion Buyer was placed into liquidation this afternoon,” the statement said.

“The company’s failure was primarily the result of actions taken by Elijah Gus Geldman who was formally one of our traders. Mr Geldman is currently in custody in the United States of America. The company has laid a complaint with the New Zealand Serious Fraud Office regarding Mr Geldman’s actions.”

The company said it had attempted to secure a capital injection from an overseas party, which would have resulted in securing the position of its investors.

The company claimed the overseas investor withdrew from investment discussions following the media coverage last week.

Investors are invited to contact the SFO on 0800 109 800 or e-mail: complaints@sfo.govt.nz

More by Duncan Bridgeman

Comments and questions
25

Sounds like Goldcorp all over again.

It is unlikely that Grace Holdings is a major fraud ...

The SFO has limited resources so surely should be concentrating on nailing the big guys.

Whilst an early investigation is admirable on the SFO's part, there are bigger crooks to fry who fleeced many many kiwi investors.

White collar crime alive and well in NZ.......

The gold con occurs every 3-5 years. While they tell investors their gold is safe as can be in a London bank, there is no real gold and the directors are lapping up the cocktails by the pool smirking from ear to ear.

not sure the story would be safe in a London bank these days!

every generation throws up a new lot of suckers!

Surely the FMA has some responsibility here.
If I was an investor I would be suing them for failing me and allowing them to take deposits without any reference to the assets that I have purchased.

The director of this company is NOT "lapping up the cocktails by the pool smirking from ear to ear". He is an honest man (and will be hurting), and has fallen victim to an overseas charlatan....I suggest we wait for the conclusion of any investigations.

Is that you, Robert Kairua?

Funny, but no...I am a personal friend..like I said, watch this space..the truth will prevail..

Absolutely right. He is a victim too - let's wait for the proper process to go through.

Leveraged gold investment, large interest bills, options for additional leverage
Wow - what were people thinking when they invested?
This is speculating, not investing. Hoping to recover ones interest bills through capital appreciation is always dangerous and more so if the manager is trading.
Had this been placed through a financial adviser they'd be strung up.
I am amazed people have so much sympathy for the investors

Interesting that neither the old Securities Commission, the SFO, the Finance Markets Authority (FMA), or the Police have lifted a finger to apply ACT's 'one law for all' to either the ACT Party MP for Epsom, John Banks, or the former ACT Party Leader Don Brash?

In fact, I have it in writing from the the SFO, the Finance Markets Authority (FMA), and the Police that they will not lay charges against Banks or Brash, which, in my considered opinion, is a form of political protection, which I believe is corrupt.

Both John Banks and Don Brash were equally former fellow Directors of Huljich Wealth Management (NZ) Ltd, whom, along with Peter Huljich equally signed Huljich Kiwisaver Registered Prospectuses which contained untrue statements.

Under the Securities Act 1978 s.58 (3) that is an offence.

Where is the ZERO TOLERANCE for 'white collar' crime in New Zealand?

In my considered opinion, in NZ - 'perceived' to be the least corrupt country in the world, according to Transparency International's 2011 'Corruption Perception Index' - the balance of power is arguably being held by a yet-to-be charged or convicted 'white collar' criminal - John Banks ACT MP for Epsom.

However - all is not lost.

When one door closes, another door opens.

Currently there are signatures being collected for a petition which requests:

"That the House conduct an urgent inquiry into the decisions regarding prosecutions relating to the Juljich Kiwisaver Schem registered prospectuses dated 22 August 2008 and 18 September 2009."

I do not anticipate any major problems in getting an MP to present this petition to the House.

For more background information, check out www.pennybright4epsom.org.nz

Penny Bright
waterpressure@gmail.com

Hi Penny - got a job yet - or still out protesting. What's the latest cause ?

Penny you are a bit over the top which doesn't help your cause

But you are absolutely correct that the authorities are selective on investigating issues like this. And that includes the NZX who also don't seem to do anything -

Nothing has changed in NZ since the 1980's - promises promises promises but no delivery
We are still living in the wild west

I don't want to defend any NZX action or inaction, but I'm struggling to see any link between what B/Buyer and Huljich are alleged to have been up to and the NZX - not their juristiction by any stretch that I can figure??

I was not agreeing with her in respect to Hulijch but in resppect to authorities in this country being lame and always just picking off the easy crooks. They seem to crow loudly about those achievements - meanwhile the Hanovers and Strategic Finance's of this world are left alone aloowing the directors of these companies to continue scheming

Saw you on tv during Occupy Auckland. I must say you looked like you just crawled out of the swampy west.

I am amazed you tried to run for office.

Same old same old ,same shit different day, people just never learn.

If you can't walk out of the place with the gold IN YOUR HANDS, then they are probably not a gold dealer.

I raised the issue of shonky advertising of gold investments with ComCom a couple of years ago (gold isn't covered by the Securities Act), even went so far as providing evidence. To my "shocked amazed disbelief" {{hard to convey the requisite degree of contemptuous sarcasm in writing}} they did nothing. I guess the question is whether we attempt to protect the lemmings or, frankly, just let them go and focus on helping people who make at least some sort of attempt to help themselves.

If Kairua was also a victim of Geldman, why didn't he advise his clients and the authorities of the theft instead of continuing to trade?

Oh that's right, a "capital injection from an overseas party" was going to save the day.

But hang on... why would anyone want to inject money into a company that had just been robbed of $4m? Was this "overseas party" so very confident of recovering the money? It sounds like a tall story.

While Geldman is probably guilty, I doubt that Kairua is completely innocent. The minute he decided not to raise the alarm he became a party to a crime.

If Kairua was also a victim of Geldman, why didn't he advise his clients and the authorities of the theft instead of continuing to trade?

Oh that's right, a "capital injection from an overseas party" was going to save the day.

But hang on... why would anyone want to inject money into a company that had just been robbed of $4m? Was this "overseas party" so very confident of recovering the money? It sounds like a tall story.

While Geldman is probably guilty, I doubt that Kairua is completely innocent. The minute he decided not to raise the alarm he became a party to a crime.

This liquidator Reynolds is a bit of a cowboy. Don't expect much out of him

Does anyone know what has transpired re the investigation by SFO and FMA?