SPI court date delayed

Murray Alcock.

The first court appearance of two men involved with property syndicates and accused of breaching the Financial Reporting Act has been put off until next month.

Murray Alcock and Allister Knight, directors of SPI Property Fund and SPI Capital, face eight charges under the Financial Reporting Act for allegedly not filing financial statements on time.

The directors of any entity raising money from the public must file audited financial statements with the Companies Office within five months and 20 working days of the balance date. The maximum penalty for not complying with the FRA is a $100,000 fine.

A string of directors that allegedly either failed to file statements at all or not on time have been charged recently by the Financial Markets Authority.

Alcock and Knight were due to have their first appearance in the Auckland District Court tomorrow but this has been adjourned until August 29.

The FMA said it expects the two defendants will be required to enter a plea on this date.

After the charges were filed against Alcock and Knight, SPI Property Fund on July 9 lodged annual accounts with the Companies Office for the 2011 to 2013 financial years.

The SPI Property Fund, owned by SPI Capital, was envisioned as a vehicle to buy mainly commercial, industrial and retail properties in New Zealand, offer documents said.

Promotional material from 2007 said the fund was aiming to raise $75 million and was "an incredible investment vehicle" in which money was secured against assets.

The reports now filed with the Companies Office say the fund raised $1.8 million from investors in 2008, of which $905,214 had been returned by the end of March last year.

The $1.8 million was not allocated to capital, as less than $4.75 million - the minimum amount required for the offer to proceed - was raised.

Almost $900,000 had yet to be repaid as at March 31 last year. As well, close to $580,000 of interest has accrued on investors' funds by March 31 last year.

The 2013 accounts were audited by Auckland accounting firm William Buck Christmas Gouwland.

In their report, dated July 1, the auditors said there were "insufficient resources in the company to enable the full repayment of these funds and the accrued interest".

The auditor's report said the company's board had not complied with the Securities Act, the Companies Act and the Financial Reporting Act.

"As at March 31, 2013, the company had funds held on behalf of investors totalling $894,786 from subscriptions received relating to a prospectus issued in 2008.

"The board has failed to comply with s36A of the Securities Act 1978 to hold those funds in trust until they were returned to investors."

Asked for a response to this, the Herald was yesterday provided with the following statement:

"The FMA requested retrospective audited accounts. We did not consider that these were required but have nevertheless complied with the FMA's request. The SPI Property Fund's focus is on realising its assets and repatriating capital, and it is in regular contact with its investors," Alcock said.