Dominion Finance Group Limited (DFG) and North South Finance Limited (NFS) were the operating subsidiaries of NZX listed Dominion Finance Holdings Limited (DFH).  Both companies traded as a finance company offering commercial and property loans and accepting deposits from the public. 

DFG had been operating, under various names since 1954.  It was acquired by Terry and Ann Butler in 1987.  They remained the majority shareholders of DFH up to its liquidation in 2009.  DFH acquired NSF in 2005.   

Both companies suspended performance of their obligations to investors in July 2008 and proposed moratorium arrangements. 

The Trustee appointed for the DFG depositors, Perpetual Trust Limited, declined to support the proposal and the company was put into receivership in September 2008.   At the time of the appointment of receivers DFG owed 5,937 debenture holders approximately $177 million. Wholesale lenders were owed approximately an additional $55 million.  The receivers expect a return of between 10 and 25 cents in the dollar will be available for secured creditors.  No funds are expected to be available for unsecured creditors.

The Trustee acting for the NFS depositors, Covenant Trustee accepted the proposal and the moratorium continued until July 2010, at which time receivers were appointed.  Liquidators were subsequently appointed on 17 September 2010. At the time of the appointment of receivers NFS owed debenture holders approximately $31 million. In addition wholesale lenders were owed approximately $15 million.  The receivers are yet to estimate the likely recovery.

DFH entered voluntary administration on 15 October 2008.  Following an administrators recommendation to that effect, it was placed into liquidation on 3 February 2009.  It has an estimated deficit owed to creditors of in excess of $115 million.

In total the group is recorded as having unpaid creditors in the region of $400 million.

After considering a referral received from the Securities Commission, the Director determined that an investigation into the affairs of Dominion Finance may disclose serious or complex fraud.  An investigation under Part II of the Serious Fraud Office Act was commenced on 28 October 2010.

On completion of the investigation a final investigation report was prepared for the Director. On the basis of this report and following consultation with the SFO Panel Counsel, the Director determined that charges should be laid in the Dominion Finance case.

Four people were subsequently charged with a combined total of 14 counts of theft by a person in a special relationship, under the Crimes Act. 

Two former company Directors, Terence Maxwell Butler (64) and Robert Barry Whale (64), and former Dominion Finance CEO Paul William Cropp (48) appeared in the Auckland District Court on 21 October, along with a fourth person who is subject to a non-publication order.

The collection and analysis of evidence in the Dominion Finance case is well advanced and the SFO has commenced interviews with key witnesses.

The SFO investigation is continuing.  The SFO will be contacting witnesses shortly to commence the interview process.

The Office is investigating a small number of related party transactions entered into by Dominion Finance and North South Finance and the disclosure of those transactions and other matters in the companies’ prospectus and other promotional materials.  Investigations are continuing.

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 Anna Tierney.  If you have questions regarding your personal involvement with this case or information that may assist the investigation, she can be contacted on anna.tierney@sfo.govt.nz or 0800 109800. 

For media enquiries call 027 705 4550