North Shore property development investigation confirmed
14 October 2013
North Shore property development
The Serious Fraud Office (SFO) has confirmed that an investigation is under way into a residential property development on the North Shore, Auckland. The development companies included Albany Heights Villas Limited and Hunter Gills Road Limited.
The investigation is being conducted under Part I of the Serious Fraud Office Act, meaning the Director has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.
Both companies went into liquidation without the project being completed. The land has now been sold to new developers.
Recent media reports have highlighted investors’ angst at how their funds have been dealt with. The investigation involves allegations that these funds were not held in trust as they had believed they would be, as well as allegations of misleading statements by the developers.
Acting Chief Executive of SFO, Simon McArley, confirmed that many of the investors reside outside of New Zealand and the terms of the agreements differ between investors.
“The legal structures of the investments offered are extremely complex. Our first task has been to get to the bottom of the legal implications of those agreements. Whether there is potential for criminal offending to be an issue will depend largely on the outcome of that analysis,” he said.
He also suggested that anyone considering payment of a substantial deposit in relation to a property that had not yet been built should take care to confirm the basis on which that money is held, and the use it could be put to pending completion of the development.
“We saw issues relating to the use of deposits in the Blue Chip investigation, and in that case the legal structure provided no limitation on the use of that money, and little or no protection to purchasers when the developments failed to materialise,” he said.
Investors wishing to contact the SFO should call on 0800 109 800 or email firstname.lastname@example.org