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On May 21 and 22 this year a Dunedin man transferred a six-figure sum in two tranches to the care of his financial adviser, Barry Kloogh, feeling secure in the knowledge he was set for retirement.
The next morning he was stunned when he unfolded his Otago Daily Times.
Unbeknown to the man, while his family's money was in transit, the SFO was moving to secure Kloogh's office and records.
The Serious Fraud Office had executed search warrants in several locations, including Kloogh's office, as it began an investigation into the financial planner's businesses.
''Our money would have virtually been going in as they [the SFO] were going through the door,'' the investor, who did not wish to be named, said.
Dunedin financial adviser Barry Kloogh is being investigated by the Serious Fraud Office. Photo / Otago Daily Times
No charges have been laid against Kloogh, but his status as an authorised financial adviser has been suspended.
Last week, the High Court placed two companies of which Kloogh was sole director, Financial Planning Ltd (FPL) and Impact Enterprises Ltd (IEL), into interim liquidation.
Events of the past few weeks have left the FPL investor and dozens of other people fearful they will not be able to get their money back.
''Now we have to wait to see what happens,'' the investor said.
''It's not a huge sum, but it's not a small sum either. It has taken five years of saving to accumulate ... Rather than leave it sitting in a bank account, with retirement coming up we thought we had better get our act together.''
The investor, who had placed funds with Kloogh for almost 25 years, met him on Monday, May 20, to put the finishing touches on a new financial plan for his family.
The following day and on the Wednesday morning, the man transferred a six-figure sum in two tranches into FPL's account.
Meanwhile, the SFO swung into action.
''I found out the very next day on the front page of the ODT,'' the investor said.
''Later in the day we got an email from the staff saying we don't know what is going on either and there is no point ringing the office because no-one is there.''
The investor applied to his bank for his payments to be reversed, but has so far been unsuccessful.
In a letter to investors last week the court-appointed interim liquidators said their appointment would protect any assets held by FPL and IEL, and that they could exercise any powers those companies had over any third party holding funds managed by the two companies.
The investor said he thought his money would be safe if he used an authorised planner, and did not know what the interim liquidation would mean for his savings.
''We were trying to do the right thing and we may have got penalised,'' the investor said.
''I am in a full-time job, I am not about to retire, I don't have a medical issue, so I don't need immediate access to the money.
''The people I feel really sorry for are clients who are in dire circumstances, want their money and now they can't get it ... I will survive this, but for others it will be a whole lot worse.''
Meanwhile, the courts have published the judgement on the Financial Markets Authority's application to put FPL and IEL into interim liquidation.
Associate High Court Judge Dale Lester's judgement reveals Mr Kloogh was unrepresented at the July 17 hearing.
The FMA's lawyer contacted Mr Kloogh's personal solicitor to advise him of the hearing, but heard nothing.
''Approximately 20 minutes prior to the telephone conference the solicitor advised the plaintiff that she was not in receipt of instructions for Mr Kloogh in his capacity as a director, nor was she acting for the two defendant companies.''
Judge Lester said he inferred Kloogh had chosen not to give instructions to his solicitor or to instruct other counsel, and as the matter was urgent he made the interim liquidation order.
The Otago Daily Times is aware of dozens of investors who are affected by the interim liquidation.
A support group has been established by one investor to help other people who had funds with FPL and IEL.
