SFO charges Capital + Merchant founders Nicholls, Douglas
SFO arrests, charges Capital + Merchant founders Nicholls, Douglas
By Paul McBeth
Dec. 9 (BusinessDesk) – The Serious Fraud Office has arrested and charged the founders of Capital + Merchant Finance Ltd. alleging misuse of funds raised to develop property in Palmerston North.
In its second swoop today, the white collar crime investigator charged director Neal Nicholls and former director Wayne Douglas with misusing some $14.5 million of funds raised to convert two Palmerston North office blocks into student accommodation. The charges relate to one set of transactions, and the SFO is continuing to look at other deals done by the lender that once sponsored TV One news.
“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,” chief executive Adam Feeley said in a statement. “This investigation and the subsequent charges demonstrate the speed with which the SFO can act, even where the case is one of significant complexity and involves many millions of dollars.”
The SFO was called in to probe the lender’s books in March by first receiver Grant Thornton, which is acting for prior ranked creditor Fortress Credit. The Capital + Merchant group of companies called in the receivers in November 2007 owing some 7,000 investors about $167.1 million, and was put into liquidation in December last year.
Nicholls, along with other C+MF directors Owen Tallentire, Colin Ryan, and Robert Sutherland face criminal charges and civil proceedings from the Securities Commission over the way they promoted their debenture stock to investors. Douglas only faces criminal charges from the commission.
The SFO has laid criminal charges against people involved in a number of well-publicised finance company failures, including National Finance, Bridgecorp, Five Star Finance.