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A New Zealand businessman stung by Western Gulf Advisory will refer the lender to the Serious Fraud Office, having successfully frozen the Swiss assets of the dubious lender.
Gary McNabb, best known as the man behind New Zealand Mint, confirmed to the National Business Review that he had paid $US750,000 in December to WGA in return for a promised $US50 million loan that never arrived.
Mr McNabb was firm in his conviction WGA was an elaborate scam that used sophisticated PR and an opulent office in Bahrain to give it a veneer of respectability and said he wanted to "shut down a very clever fraudster."
Mr McNabb had a strong message for Terry Serepisos, the troubled Wellington developer who still publicly backs WGA: "Give it up, it's a fraud. You're dreaming."
After NBR began critical reporting of WGA's activities in February, Mr McNabb demanded the refund of his $US750,000 in fees but was rebuffed.
NBR was the first media outlet to raise concerns about the lending practice of WGA.
Mr McNabb said that in March he hired private investigator and barrister Mark van Leewarden, who coordinated an aggressive campaign against WGA.
The bank freeze of WGA's accounts in Switzerland with Credit Suisse and UBS in early May caused international ructions with WGA subsequently defaulting on the purchase of Spanish La Liga team Racing Santander.
Mr van Leewarden has also laid a criminal complaint of fraud with the Swiss attorney-general. "That means there's a criminal complaint on foot that overlays the freezing of the Swiss account," Mr van Leewarden, the principal of Warden Consulting, said.
Mr McNabb and Mr van Leewarden said they would be laying a complaint about WGA with the Serious Fraud Office and hoped the agency would activate cross-jurisdictional mutual legal request agreements to aid the investigation in Switzerland.
Mr McNabb said his pursuit of WGA so far cost him $100,000 and he expected his final bill to double as he sought to bring criminal proceedings against WGA founder Ahsan Ali Syed.
The soured deal was brokered by Luxembourg and Auckland-based former banker Daniel Hunt, who is also the connector for Mr Serepisos and WGA.
Mr Serepisos, facing bankruptcy proceedings, is understood to still be "keeping the faith" with WGA.
Middleman role questioned
Middleman Mr Hunt, who approached Mr McNabb in August suggesting WGA as a financier, also came in for criticism from Mr McNabb.
"We relied on him as an agent, and he seemed credible. I don't distrust him, I think he's also a victim in all this, but he didn't do his due diligence that we relied on," Mr McNabb said.
Mr McNabb confirmed Mr Hunt had been paid fees for his services coordinating business with WGA and said he stood to gain a $1 million commission if the loan had arrived.
Mr Hunt told NBR in April he worked as an employee for Mr Serepisos and denied a wider relationship with WGA: “I have no relationship with Western Gulf,” he said.
Aside from Mr Serepisos and Mr McNabb, NBR has obtained documents and correspondence confirming Mr Hunt has connected at least one other party – a Russian consortium – with WGA.
NBR understands the Russian party has been unsuccessfully agitating for a refund of its up-front fees paid to WGA.
Auckland lawyer Kerry Knight told the NBR in March Mr Hunt had persuaded him to travel to Bahrain to meet with WGA in May 2010.
Mr Knight said he pulled out of negotiations with WGA and told Mr Hunt he suspected the business was was a scam. "And there were a lot of reasons why it was a con, and not many on the other side. But he [Mr Hunt] still firmly believed it,” Mr Knight said.
Mr Serepisos is facing bankruptcy proceedings brought by South Canterbury Finance and Canterbury Mortgage Trust. The next hearing is scheduled for August 15 in the High Court in Wellington.
In previous court appearances over unpaid bills, Mr Serepisos has stated in evidence he expected to satisfy creditors with his WGA loan.
As recently as last week Mr Serepisos told the Dominion Post he was "very, very, very confident" that WGA would deliver.
Loan for property
Mr McNabb is the director and 100% shareholder of high-profile bullion and collectable coin firm New Zealand Mint. The company has said its collectible coin business earned $20 million in revenue in 2009.
Mr McNabb was keen to stress the planned WGA loan was to his property vehicle McNabb Group Properties – separate from New Zealand Mint – and the funding was intended to finance a $30 milliion hotel development in Auckland and the mooted – but stalled – $20 million tourism venture Waihi Gold Discovery Centre.
The Discovery Centre was mooted in 2007 and has attracted $3 million of New Zealand Trade and Enterprise and Hauraki District Council funding with NZ Mint to provide the bulk of financing.
The Council's 2011/2012 annual plan notes the project has run into troubled waters associated with the global financial crisis and “alternative development funding” was being sought.
WGA under siege
Today’s revelations appear to signal the end is near for WGA, after Australian victim Keith Johnson secured a similar freezing order in May against the organisation in Bahrain.
Mr McNabb is the third confirmed New Zealand victim of WGA. Mr Serepisos’s long-promised $US100 million loan has never arrived despite up-front fees being paid, and troubled farmer Allan Crafar told NBR in March he lost £27,000
Mr Ali is reportedly subject to arrest if he returns to his native India after accusations he ran a smaller-scale version of his loan scam in Hyderabad 10 years ago.
The high-profile purchase of Racing Santander by WGA in February has also run off the cliff with players and staff of the club threatening to sue over unpaid wages.
Defaults on payments promised by WGA and Mr Ali led the club to file for bankruptcy protection earlier this month to buy time for restructuring and to find a new owner.
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