Nearly 3 years after the Serious Fraud Office abandoned its investigation of Viaduct Capital Ltd & Mutual Finance Ltd (now Ex-MFL Ltd), the Financial Markets Authority has filed criminal charges against 5 directors or former directors of the 2 companies and another person who has sought name suppression.
One of those charged, former Viaduct director Nic Wevers, died on Wednesday aged 59. The Financial Markets Authority said on Friday it would withdraw the charges against Mr Wevers following his death. A service for him will be held at All Saints Chapel, Purewa, on Tuesday at 1.30pm.
The authority filed charges under the Crimes Act & Companies Act against Mr Wevers, Paul Bublitz, Bruce McKay, Richard Blackwood, Lance Morrison & the unnamed person. Mr Bublitz, Mr McKay & Mr Blackwood were directors of both companies and Mr Morrison of Mutual.
Both companies went into receivership in 2010, Viaduct owing 110 deposit $7.8 million and Mutual owing 450 investors an estimated $17 million $9.3 million.
The charges allege theft in a special relationship, laid under section 220 of the Crimes Act and carrying a maximum sentence of 7 years in jail, and making false statements in a prospectus, laid under section 242 of the Crimes Act and carrying a maximum 10-year jail sentence. The authority has also filed charges under section 377 of the Companies Act relating only to Viaduct, alleging false statements made to Viaduct’s trustee, which carry a maximum sentence of 5 years’ jail or a $200,000 fine.
The defendants’ first court appearance has been scheduled for the Auckland District Court on Wednesday 7 May.
The Serious Fraud Office began investigating Mutual Finance in December 2010 when the company’s receiver, the Ministry of Economic Development & the Securities Commission passed information on, but closed the investigation in June 2011, saying the allegations didn’t currently identify sufficient evidence of fraud. However, the office’s chief executive at the time, Adam Feeley, said the 2 companies’ affairs could continue to be scrutinised, and some information that had raised concerns would be best considered by the Financial Markets Authority.
Although Mr Bublitz wasn’t a director of Viaduct Capital, he had numerous other relationships with the start-up finance company, which wanted to raise $50 million from the public in term deposits & $5 million in capital notes. Viaduct signed a management services agreement with Mr Bublitz & one of his companies, Hunter Capital Group Ltd, in August 2009. Before & after that agreement was signed there were related-party transactions between Viaduct and Mr Bublitz & his interests which raised a string of questions from Treasury. In each case the company argued transactions were at arm’s length.
Mr Bublitz & 2 partners built up a large property portfolio in the 1990s and entered into a joint venture with NZI Life to own & develop commercial properties. In 1999 he founded Strategic Finance Ltd, left it in 2006 when Allco of Sydney bought in and re-entered the finance company market early in 2009 to support the development of Viaduct Capital.
More recently he’s been a director of Hunter Capital Ltd, Noske Kaeser Group Ltd & Titan Hunter Holdings Ltd.
Mr Wevers worked at Marac Finance Ltd in the 1980s. A brother of Sir Maarten Wevers, who retired as head of the Department of Prime Minister & Cabinet in 2012, Mr Wevers took the Government Property Service to listing as Capital Properties NZ Ltd in 1998 and led its expansion in 1999 through the takeover of Shortland Properties Ltd. Since then, he was briefly chief executive at Blue Chip Financial Solutions Ltd, also briefly a director of NZX-listed Kermadec Property Fund Ltd, managing director of ING Real Living Group when ING was looking at establishing a retirement village business, set up a property management company, and was an agent for Bayleys for a short time before opening an NAI Harcourts franchise on the other side of the Viaduct business centre courtyard. He was president of the Property Council for 3 years.
Mr Wevers quit as chief executive of Capital Properties NZ Ltd to take on the same role at financial services group Blue Chip NZ Ltd in time for its backdoor NZX listing through Newcall Group Ltd in June 2004.
Within weeks of listing, Blue Chip’s founder & 75% shareholder, Mark Bryers, was back on the board and Mr Wevers became managing director. But Mr Wevers didn’t last. Less than 3 months after listing, he resigned as managing director, making way for Mr Bryers to assume full control.
Mr Morrison was a director of Palmerston North accountancy firm Morrison Advisory Ltd, and then of Morrison Creed Advisory Ltd until he retired in October 2009. He was appointed a director of Mutual Finance in December 2009, along with Mr Bublitz & Paul Hocking, of Martinborough.
Mr Blackwood is a director of Rockefeller Finance Ltd & Rockefeller Funds Management Ltd. Mr McKay is a director of Esperance Capital Ltd & Saffron Capital Ltd. Mr Hocking is an independent director & chairman of the audit committee of Trustees Executors Ltd and the other director of Esperance Capital.
5 June 2012: Intensive development site above Albany wins consent, up for mortgagee tender fortnight later
21 June 2011: SFO closes Mutual Finance & Viaduct Capital investigation
31 December 2010: SFO launches investigation into Bublitz’s Mutual Finance
15 July 2010: Treasury withdrew guarantee from Viaduct Capital, gets caught by second Bublitz company
22 April 2009: Treasury withdraws guarantee from Wevers’ new company Viaduct Capital
6 March 2009: Wevers launches Viaduct Capital with $50 million prospectus
10 September 2004: Wevers out, Bryers takes over at Blue Chip
Attribution: FMA release, company checks.