Blue Chip escapes SFO noose

Serious Fraud Office chief executive Adam Feeley Photo / Brett Phibbs

Despite a widespread view that finance firm Blue Chip operated in a moral vacuum, there is not enough evidence to lay Serious Fraud Office charges against the group, chief executive Adam Feeley said.

The SFO announced yesterday it would not lay fraud charges against the Blue Chip group of companies, which are in various stages of receivership and liquidation.

However, the SFO is still investigating one of the group's South Island franchises.

Feeley said to lay fraud charges against an individual, there had to be a reasonable prospect, based on credible evidence, that a jury could be satisfied a crime had been committed - and in this case that evidential threshold had not been met.

"Some may consider that Blue Chip operated in a moral vacuum with high pressure sales techniques and less-than-forthcoming disclosures regarding the nature of the property investments.

"This is not a decision lightly made. We've collected enormous numbers of documents, conducted interviews with investors, Blue Chip staff, and senior officers.

"However, after extensive discussions with the Crown Solicitors, we concluded there's insufficient evidence to implicate any individual with criminal conduct."

The professional conduct of lawyers involved with Blue Chip has been forwarded to the Law Society for inquiry.

The SFO also announced it is investigating several related party transactions between Dominion Finance and North South Finance.

Feeley said the SFO would co-ordinate with the Registrar of Companies and the Securities Commission, which laid criminal charges and issued civil proceedings against both companies in July.