The Serious Fraud Office has arrested and laid six charges under the Crimes Act against one current and one former director of Capital+Merchant Finance (CMF).The two accused are Neal Medhurst Nicholls aged 55, and Wayne Leslie Douglas (57) and the charges
The Serious Fraud Office has arrested and laid six charges under the Crimes Act against one current and one former director of Capital+Merchant Finance (CMF).
The two accused are Neal Medhurst Nicholls aged 55, and Wayne Leslie Douglas (57) and the charges involve nearly $14.5 million of related party lending dating back to 2002.
They concern loans made between April 2002 and September 2004 to three companies that converted two Palmerston North high-rise office blocks into student accommodation.
The SFO alleges that as directors of CMF Mr Nicholls and Mr Douglas held investors’ funds subject to a special relationship with investors and that they used their position to apply those funds in a manner inconsistent with that relationship.
The SFO also alleges the directors falsely stated the true extent of related party lending in annual CMF prospectuses and associated financial statements in July 2003 and September 2004.
They pair was remanded on bail and will next appear on 16 December 2010.
SFO boss Adam Feeley said the charges relate to one discrete set of transactions.
“While we have completed investigations into these matters, the SFO is continuing to investigate a number of other transactions that are of serious concern to us.”
The SFO began investigating CMF in March following a complaint from C+MF receivers, Grant Thornton.
When the company was placed into receivership it owed $167.1million to approximately 7000 investors.
