Blue Chip founder 'used alias' to earn sales fee

A former employee told the court that Mark Bryers used an alias to procure sales. Photo / Herald on Sunday

As the Blue Chip property investment group ran short of cash it got staff and relatives to sign up for apartments, including a "Ronald Marks" - an alias for founder Mark Bryers.

The High Court has heard from a former employee, James Hutchins, who believes that by late 2007 Blue Chip was depending on pre-selling a certain number of units in the yet-to-be built Icon development in central Auckland.

Blue Chip would earn an underwriting fee of 12 to 15 per cent once it achieved the sales, he said. "I knew there was a financial incentive for Blue Chip to procure as many sales as possible."

Mr Hutchins worked for Blue Chip companies from 2005 until the group collapsed in February 2008.

He said the group had already sold more than 100 Icon apartments, but then decided it couldn't proceed with the building. Deposits paid by some original investors were lost.

Mr Hutchins said he believed Icon Central Ltd was incorporated in 2007 specifically to develop the property and sell the apartments for the second time. In October 2007, shares in Icon Central were transferred to a separate company, Paxton Pacific, which ultimately developed the building.

Icon Central was to pay an underwriting fee to Blue Chip if it achieved a certain threshold of pre-sales in the building.

Icon also had to achieve a particular number of pre-sales in order to get funding from its bank, Westpac, he said.

But sales were slow, and staff - including Mr Hutchins himself - Blue Chip licensees and even relatives of staff signed deals for the apartments on the understanding that they would never have to settle on them.

He said if staff signed up and the pre-sales target was met, "we would receive a percentage of the underwrite fee".

Some of the original Icon agreements involving Australians were reassigned to new buyers, he said. "Ronald Marks" was put down as the purchaser of two of these apartments. "Ronald Marks was in fact an alias [for] Mark Ronald Bryers," Mr Hutchins said.

He said he personally would not have used an alias to sign an agreement and he questioned Mr Bryers about it. "I was inquisitive and concerned."

Other Australian agreements were also assigned to Blue Chip-related people. The deposits paid by the original Australian buyers were still in a solicitor's trust account, he thought, "but I understood they were credited as having been paid by the new named purchaser such as Ronald Marks".

Mr Hutchins said he could not raise a deposit, but in October 2007 he signed two agreements on Icon apartments. "By then it [had] become clear that otherwise we would not be able to get over the sales threshold. The only option was to have the deposit paid by Icon or some entity related to it, which would be repaid out of the funds from Westpac."

The High Court is hearing representative cases for 250 Blue Chip victims who are trying to recoup some of their losses.

They say they should be released from investments in buildings such as the Icon and get their deposits back.