29 Oct 2010

Blue Chip companies won't face charges

8:40 am on 29 October 2010

The Serious Fraud Office has completed investigations into failed Blue Chip property investment companies and does not intend to lay any charges.

SFO chief executive Adam Feeley says it has taken the decision because the evidence it has surveyed would not stand up in court.

He says while there may be moral concerns regarding Blue Chip's sales techniques and less than forthcoming disclosures about the nature of its property investments, the SFO found insufficient evidence to lay criminal charges.

It has, however, referred some of the matters involving the professional conduct of lawyers involved in the Blue Chip developments to the NZ Law Society for inquiry.

In May, Blue Chip founder Mark Bryers was sentenced in the Auckland District Court on 34 charges, most of them relating to inadequate financial reporting, such as failing to complete or sign off company accounts.

Bryers was ordered to pay fines of $37,500 and serve 75 hours' community service.

More investigations

The agency says it will open more investigations into failed finance firms before the end of the year, now resources have been freed up following the recent conclusion of several cases.

It has opened an investigation into Dominion Finance, taking the total number of financial companies currently under investigation to 23.

Dominion Finance collasped in 2008 owing nearly 6000 investors $177 million.

The investigation into the company centres around related party transactions between Dominion and North South Finance.

SFO chief executive Adam Feeley says the transactions were originally scrutinised by the Securities Commission, but will now be taken up by the SFO.