Archive | Capital and Merchant

FMA ends proceedings against Capital + Merchant directors

The Financial Markets Authority said yesterday it had discontinued its civil proceedings against the directors of Capital + Merchant Finance Ltd.

The Financial Markets Authority’s predecessor, the Securities Commission, laid criminal charges in 2009 under the Securities Act against 5 directors of the company – Neal Nicholls, Owen Tallentire, Colin Ryan, Wayne Douglas & Robert Sutherland. These charges related to untrue statements in offer documents distributed in 2006.

At the same time, civil proceedings were filed against 4 of the directors – Messrs Nicholls, Tallentire, Ryan & Sutherland – seeking declarations of civil liability & civil pecuniary penalties. The civil proceedings were stayed pending the outcome of the criminal proceedings.

The Financial Markets Authority assumed responsibility for the criminal proceedings alongside the Crown Solicitor in 2011. In 2013, the 5 directors pleaded guilty to the criminal charges and received varying sentences of home detention, community work, and some directors made reparation payments of between $60-100,000.

Capital + Merchant Finance’s liquidators settled their claim this year against the company’s former auditors for $18.5 million. The Financial Markets Authority said this sum was subject to claims from a number of other parties and the balance would be available for distribution to investors. The receivers’ claim against the company’s former trustee & former solicitor is still before the courts. The receivers hope to write to investors in the next 2 months to start the distribution process.

The Financial Markets Authority said it had determined that, in light of the outcome of the criminal proceedings, the actions taken by the receivers & liquidators and the limited personal assets of the directors, there would be little prospect of any recovery for investors if it were to pursue its civil claim.

“The authority considers that the misconduct that was the subject of the civil proceedings has been adequately addressed through the criminal process, and the further time & cost of pursuing the civil proceeding would not be justified or in the public interest.”

Capital + Merchant Finance owed $167 million to 7500 investors when it was placed in receivership in November 2007.

Attribution: FMA release.

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Mixed outcome in Capital and Merchant verdicts

Published 19 July 2012

Capital + Merchant Group directors Wayne Douglas, Neal Nicholls & Owen Tallentire were found guilty of some charges but cleared of others when they appeared before Justice Edwin Wyllie for delivery of his verdicts in the Auckland High Court today.

Mr Douglas & Mr Nicholls were both cleared on 3 charges relating to $14 million of finance for the Hub development in Palmerston North. They were found guilty on 3 charges relating to loans of $7.7 million from Capital + Merchant Finance Ltd to Capital + Merchant Group Ltd and the same amount plus another $4.4 million loan to Clyde Investments Ltd.

Mr Tallentire was found guilty on the first charge in this second batch but guilty on the other 2. He & Mr Nicholls were cleared on a fourth charge relating to sale of Numeria Leasing Ltd by Numeria Finance Ltd for $8.29 million.

Most of the charges concerned related-party transactions.

Mr Douglas & Mr Nicholls formed the Capital + Merchant group in 2001 and Mr Tallentire was appointed in October 2006. Mr Douglas resigned as a director of parent company Capital + Merchant Group Ltd in 2007.

They will be sentenced on Friday 31 August.

The Crown has indicated jail sentences are appropriate, while the defence has indicated appeals are likely. The judge confirmed jail terms were likely and declined bail, but added: “That does not mean it (jail) is inevitable.”

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Attribution: Court hearing, story written by Bob Dey for the Bob Dey Property Report.

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Fortress puts receivers into Capital + Merchant

Published 30 November 2007

The Fortress finance group of Australia put 2 companies in the Capital + Merchant group of Auckland into receivership yesterday.

 

Tim Downes & Richard Simpson of Grant Thornton were appointed receivers of Capital + Merchant Finance Ltd and Capital + Merchant Investments Ltd by Fortress Credit Corporation (Australia) 11 Pty Ltd.

 

The receivers said Capital + Finance had breached general security agreements. 7000 investors had $190 million invested with Capital + Finance.

 

The Capital + Merchant companies are subsidiaries of Capital + Merchant Group Ltd and predominantly lent to the property & property development sector.

 

The receivers said the current state of the debenture market had significantly constrained the ability of the companies to attract new funds and retain existing investments, leading to the receivership.

 

Directors of Capital + Merchant Finance Ltd are Neal Nicholls, Remuera; Colin Ryan & Robert Sutherland, Queensland; & Owen Tallentire, Herne Bay. Mr Nicholls & Mr Tallentire are the directors of Capital + Merchant Investments Ltd.

 

Mr Ryan replaced Wayne Douglas, Mairangi Bay, as a director of parent company Capital + Merchant Group Ltd, in January. Mr Tallentire was appointed in October 2006.

 

Mr Douglas & Mr Nicholls formed the group in 2001.

Mr Ryan, a former managing partner of the international accounting firm Arthur Andersen in Queensland, is chairman of the Brisbane Airport Corporation Ltd, chairman of CMI Ltd, a director of RP Data Ltd, a fellow of the Institute of Chartered Accountants in Australia and a fellow of the Australian Institute of Company Directors. He was awarded the Order of Australia in 2004.

 

Mr Sutherland is a former director of Regal Salmon Ltd, Southern Ocean Salmon Ltd, The NZ King Salmon Co Ltd & Excell Corp Ltd.

 

Website: Grant Thornton

 

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Attribution: Company statement, story written by Bob Dey for this website.

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