SFO opens round-two investigation into NZF Group

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The Serious Fraud Office has opened a second round of investigations into collapsed lender NZF Money and the NZF Group – focussing on alleged related-party transactions.

NZF Money, a commercial and residential lender, was placed into receivership in July, owing debenture holders about $16.4 million.

The Financial Markets Authority (FMA)  exposed NZF's short-term funding problems when it forced the company to pull its prospectus, which hoped to raise $359 million in July.

SFO boss Adam Feeley says the fraud fighter will now work closely with the FMA to investigate alleged related party transactions between group directors and officers between 2006 and now.

“We are satisfied there are valid grounds for an investigation into the wider group, and there is a legitimate interest in publicly advising investors of this investigation,” says Mr Feeley.

Shares in parent company and deposit-taking arm NZF Group (NZF), trading at 0.6c this afternoon, are in a trading halt. They have shed 80% of their value this year.

NZF chief executive said in a statement to the NZX today it has  has no knowledge of alleged related-party transactions, but will co-operate with the SFO's investigation.

Peter Huljich resigned as a non-executive director and chairman of NZF Group in April last year. 

In December, he was convicted and fined $112,632 after pleading guilty to misleading the public in the investment statements issued for Huljich Wealth Management's Kiwisaver fund.

NZF Money debenture holders have been warned they will get back less than half of what they are owed.

Receivers Grant Graham and Brendon Gibson of KordaMentha have recently estimated the return to be between 25%-42% -- a maximum overall recovery of $6.9 million.

The shortfall was well flagged: Receivers said the loan book was significantly over-valued, at $28.3 million, upon receivership.

Since then, KordaMentha has managed to recover $2.2 million in repayments from borrowers and to sell a subordinated note for more than $900,000.

But twenty loans totalling $27 million remain outstanding.

Receivers say it's extremely unlikely there will be anything returned to unsecured creditors – owed $115,000.


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12 Comments & Questions

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What a joke Mr Feeley

A round 2 investigation into NZF

What about a round 1 investigation into Strategic Finance now that your stumbling block Jock Hobbs has departed the scene of the crimes??

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dear Doctor - i think the difference is that Strategic is just very good at dragging the whole thing out. NZF is most likely a target because of whats happened with rearranged deck chairs - maybe the SFO have run out of things to do - what i find interesting is they announced they were investigating Hell Pizza and an associated supplier - they found nothing and have closed the file, yet they did not make a public announcement exonerating either party so leaving a cloud of suspicion over both compnaies - how is that fair???

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You are spot on

There were more related party transactions at Strategic Finance than the rest of the finance companies put together.

Surely the SFO with Feeley in charge has the grunt to take on the Strategic directors and Consultant - one would certainly hope so

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Soho, Bendemeer, Bob's Cove, Hilton Fiji, Landco range of deals - the list goes on

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don't mess with the Consultant he doesn't like it.

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The term is more like interrelated - so not related at all. Who cares what the consultant thinks

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Who is this Consultant everyone keeps referring to??

He can't be that bent or scary as you all make out.

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No one seems brave enough to name this person?

I thought this was NZ not Sicily - he must be really scary - even to the SFO

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Brian Fitzgerald

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now you have done it ...you will sleep with the fishes.

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The Consultant can't be that much of a psycho?? Can he??

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Define psycho and I'll come back to you.

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