Diocesan School for Girls' Cayman investment sparks parent complaints

Diocesan School for Girls in Epsom, Auckland. The school's fund-raising arm disclosed it had nearly $1m at risk after investing in a Cayman Islands-based company being investigated for fraud. Photo / Michael Craig

Diocesan School for Girls' use of donated funds to invest in an apparent large-scale fraud linked to the Cayman Islands has triggered a formal complaint to the Charities Service.

Charities Service general manager Natasha Weight in a statement confirmed receipt of the complaint and said: "The matter is under consideration. As is our regular practice, we won't be commenting further until this matter is concluded."

The complaint, from a concerned parent with a daughter at the school, asks the Charities Service whether trustees of the Diocesan entities "exercised due care and skill, and complied with all of their obligations" in light the investment losses.

Last week the Weekend Herald broke news two charitable entities connected to the school - its Heritage Foundation and the Doris Innes House Trust - had collectively invested $1.2 million with the Caymans-based Penrich Global Macro Fund, which was frozen in March after the discovery of a "significant discrepancy".

The Serious Fraud Office also began investigating Penrich in April.

Parents who contacted the Weekend Herald this week were scathing of the investment decision.

"Horrendous, how could this happen? We'd donated money to Dio - to see them waste it like that is pretty disappointing," one said.

"Clearly there were not 'robust governance and investment protocols in place', otherwise they would not have wasted so much money fundraised through the efforts of the community," said another.

The concerned parents did not wish to be named to avoid repercussions from school management for their daughters.

In an unsigned statement sent by a public relations practitioner in response to Weekend Herald questions about concerns parents had about speaking out publicly, Diocesan said: "Any person in the school community who has questions in regards to the foundation are encouraged to contact the trustees directly, as they believe this is the appropriate forum for any discussion."

The affair triggered a bout of infighting within Diocesan, with board of trustees chairman Andrew Peterson yesterday sending an email to parents saying the Penrich investment began in 2016 "on the recommendation of AMA Capital and with the approval of the foundation's investment committee".

The email notes: "At the time, Angela Anderson was chair of the Heritage Foundation and principal of AMA."

The Heritage Foundation's current investment committee is comprised of finance industry heavyweights Anderson, David Ballentyne, David Gibson, Geoff Lawrence and Peter Green.

None of the committee, with the exception of Anderson, wished to comment further about the Penrich investment when contacted by the Weekend Herald this week.

Anderson said her work with Dio was pro bono and AMA charged no management fee to the Heritage Foundation and she also had invested her own personal funds with Penrich.

Both Anderson and Peterson cited a review by investment consultants MyFidiciary commissioned by the Heritage Foundation in the wake of the impairment that concluded Penrich appeared to be a "well-executed fraud" that was "not possible (or extremely unlikely) to be picked up via the standard reporting and disclosures of the firm".

Peterson's email to parents on Friday morning included a barb at media scrutiny of their finances: "It is important that you are aware of the facts and not just the information the media will choose to use."