Software row brings Phillips back to NZ

David Phillips at his home in Pokeno. Photo / Greg Bowker

Former 1980s corporate high-flyer David Phillips, who once set up a tepee village on his Pokeno farm, is embroiled in a bitter dispute with a Maori company over a software business.

Companies on both sides of the Tasman are in receivership and court action is pending following the breakdown in relations between Phillips' investment company, Open Group, and Ngati Tama Custodian Trustee of Taranaki.

A Serious Fraud Office investigation followed the collapse of Phillips' Pacer Kerridge Corporation in the early 1990s, but the former executive chairman was acquitted in 1997 on fraud charges involving $13.7 million.

He retreated to his Pokeno farm where he held a five-day event to look at alternative ways of rebuilding the world. Visitors stayed in tepees.

Now based in Russia, Phillips says he is back in New Zealand to sort out the row over MyVirtualHome, a software package similar to CAD programmes used by professional architects and engineers but designed so the average homeowner can use it.

It allows people to take a 3D tour through a property and make virtual alterations to see how they would look.

More important than sales of the software is its potential as a new media channel, says Phillips, with suppliers of home and garden products advertising on the site. Panasonic is one company testing it in Australia.

The product was launched through Better Homes and Gardens in November 2005, with the Australian magazine giving away over 400,000 CDs featuring MyVirtualHome.

Phillips says a total $26 million has been invested in MyVirtualHome, $7 million of that from Ngati Tama.

His Open Group company, which has a number of shareholders, got involved as a financial backer in 2005.

Phillips worked as a consultant to MyVirtualHome International, registered in New Zealand, and its Australian subsidiary Creative Designer Software Pty from mid-2005 to August 2008 when, he claims, he was asked to leave and the Open Group shareholders were excluded from the business.

"They're relying on the challenges I had in the 80s and 90s to try and have me not challenge them back again. It's been part of an overall scheme, in my view, to effectively take control."

Phillips says Ngati Tama got involved after it came to Russia looking for investment opportunities and was put on to MVHI.

The Ngati Tama iwi comes from northern Taranaki, in the area between Urenui and Mokau. In 2003 it received a $14.5 million Treaty claim settlement from the Crown.

Greg White, who stood for National in the Maori seat of Te Tai Hauauru at the 2002 election, was a leader in the claim negotiations and is the manager of Ngati Tama Custodian Trustee. His father, Stephen White, is listed as the sole shareholder of the company.

Greg White referred the Business Herald's inquiries to his lawyer, Nick Scott of Kensington Swan, who would not comment on whether Ngati Tama Custodian Trustee represents the wider iwi.

Phillips says matters came to a head last Christmas Eve, when Ngati Tama took out a debenture over Creative Designer Software.

But the parent company, MVHI, had the prior security, Phillips claims, and in June this year Open Group - as the major backer and shareholder of MVHI - was forced to call in the receivers to protect its interests.

Two weeks later Ngati Tama appointed receivers to Brisbane-based Creative Design Software.

Phillips alleges Ngati Tama is attempting to cancel valuable MVHI licences, including a recent deal in China.

The MVHI receiver has filed papers in the High Court at New Plymouth.

Kensington Swan's Nick Scott says his client welcomes the opportunity to deal with the issues in court. The claims are "aberrant nonsense," he says. "All the allegations are strongly refuted. Ngati Tama has acted in the best interests of MVHI and its wholly-owned subsidiary CDS, and that's really it."

MAKING HEADLINES FROM POKENO TEPEES TO RUSSIA

David Phillips was the high-profile face of Pacer Kerridge Corporation, the bloodstock and cinemas conglomerate formed when Pacer Pacific bought Kerridge Odeon.

It collapsed in 1992, owing its bankers $129 million.

The Serious Fraud Office investigated but in 1997 Phillips was acquitted on three fraud charges involving $13.7 million. The jury could not reach a verdict on a further four.

Once reported to be worth more than $50 million, he made headlines in 1995 when an Easter function at his Pokeno property included tepee-building lessons, healing by music, folk dancing and meditation by moonlight.

He moved to Russia around 2002 from where he runs his investment business Open Group.