7 February 2013
The Financial Markets Authority investigation into Strategic Finance Limited has now concluded, with FMA forming the view that six of the company's directors are likely to have breached the Securities Act.
The apparent breaches relate to statements made in a registered prospectus, investment statement and in an advertisement between March 2008 and August 2008.
The directors are Kerry Finnigan, Graham Edward Jackson, Marcel Aubrey Lindale, Timothy John Rich, Denis Grenville Thom and David John Wolfenden.
Strategic went into receivership in March 2010 owing approximately 11,000 investors $383 million.
FMA has notified the directors of its findings and has agreed to provide them with an opportunity to respond to FMA's proposed claim before civil proceedings are filed.
"FMA's role as a publicly-funded litigant, acting in the public interest, necessitates this announcement to keep the market and investors informed," said FMA Head of Enforcement, Belinda Moffat.
Tony Reid on 021 739 052 or firstname.lastname@example.org
Between August 1999 and August 2008 Strategic Finance Limited (Strategic) carried on the business of providing finance and other financial services, primarily to the property sector.
Strategic's principal business involved lending money to property developers and investors in commercial, industrial and residential property in New Zealand, Australia and the Pacific Islands. Loans were made through term loans, bridging loans and development and construction loans, in a mixture of first, second and third-ranking facilities.
On 7 August 2008 Strategic placed a trading halt on all its securities. Trading of Strategic's securities did not resume after the trading halt.
In December 2008 Strategic went into Moratorium. In March 2010 Strategic went into receivership. Strategic's failure affected approximately 11,000 investors with a loss of $383m. The receivers have distributed to secured debenture investors 10 cents in the dollar during the receivership to date.
From April 2010 FMA (and before 1 May 2011, the Securities Commission) has investigated the conduct of the directors of Strategic and its subsidiary Strategic Nominees Limited with respect to Strategic's compliance with disclosure obligations under the Securities Act. Today's news release is the result of that investigation.
In December 2012 the receivers also announced that they have notified the directors of a civil claim and are now engaged in settlement discussions with the directors on a without prejudice and confidential basis in accordance with a formal process.