Capital+Merchant Finance Limited traded as a finance company offering property and investment loans, and accepting deposits from the public.  It was placed into receivership on 23 November 2007 owing approximately 7,500 investors around $167 million.   The receivers representing the public investors do not expect any recovery as the assets of the company will be applied to meet the claims of the prior security holder. 

After considering a complaint received from the receivers of the company, the Director determined that there were reasonable grounds to believe an offence involving serious or complex fraud may have been committed.  An investigation under Part II of the Serious Fraud Office Act was commenced on 18 February 2010.

Charges were laid against Neal Medhurst Nicholls and Wayne Leslie Douglas on 9 December 2010 in relation to the transaction known as the Hub Property Transaction. 

After considering additional matters that came to light in conjunction with the investigation of the Hub Transaction, the Director determined that there were reasonable grounds to believe further offences involving serious or complex fraud may have been committed.  A new investigation file was opened to enable further investigations under Part II of the Serious Fraud Office Act to continue.

This trial will follow the Capital & Merchant Finance Limited (case 1802) trial. To appear in the Auckland High Court, Nicholls, Douglas and Tallentire have been jointly charged with 3x s220 Crimes Act 1961. Nicholls and Tallentire have been further charged (jointly) with 1x s220 Crimes Act 1961.

On 13 July the SFO laid a further eleven charges under the Crimes Act against current directors of Capital + Merchant Finance Limited, Neal Medhurst Nicholls (55) and Wayne Leslie Douglas (57). A third man, former Capital + Merchant director, Owen Francis Tallentire (64), has also been charged in relation to these offences.

The charges relate to transactions involving just over $28 million that occurred between 2004 and 2006.
The SFO alleges that these transactions were entered into in breach of the restrictions contained in the company’s trust deed, and resulted in trusts controlled by the accused receiving benefits totalling approximately $15.9 million. 

The accused have been summonsed to make their first appearance in relation to these charges on 5 August at the District Court in Auckland.

The Office is investigating a number of transactions entered into by Capital+Merchant Finance and related parties in the period 2004 and 2007.  An interim investigation report is expected to be completed for consideration by the Director by the end of March 2011.  A decision will be made following that regarding the continuation of the investigation and/or prosecution.

If you have information you would like to discuss with the SFO, please make contact with us via the contact details below.

The case manager for this case is Willie Harris.  If you have questions regarding your personal involvement with this case or information that may assist the investigation, he can be contacted on willie.harris@sfo.co.nz or 0800 109 800. 

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