The first of two Serious Fraud Office cases against former directors of the failed Capital+Merchant Finance is due to begin today in the High Court at Auckland.
Capital+Merchant offered property and investment loans and went into receivership in November 2007 owing $167 million to around 7500 investors. The SFO has laid two sets of charges against Capital+Merchant directors following the collapse.
Former directors Neal Medhurst Nicholls and Wayne Leslie Douglas face criminal charges for theft by a person in a special relationship and the publishing of false statements. Some of the charges carry a maximum penalty of 10 years' jail.
Today's case concerns loans of about $14.5 million made to three companies that converted two Palmerston North office blocks into student accommodation, a project called "the Hub".
The second set of charges were laid in July and involve Nicholls, Douglas and former director Owen Francis Tallentire. They relate to transactions worth $28 million made between 2004 and 2006. These transactions allegedly gave trusts controlled by the three defendants $15.9 million in benefits.
