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The Serious Fraud Office announced today that it has commenced an investigation into a Blue Chip franchise which operated in the South Island.

SFO commences additional investigations into Blue Chip transactions

The Serious Fraud Office announced today that it has commenced an investigation into a Blue Chip franchise which operated in the South Island.

SFO Director, Adam Feeley, said “Police have forwarded us information suggesting that documents provided to investors by a Blue Chip franchise employee were misleading.”

The SFO said that there was also an allegation that lending documents may have been altered by that employee to induce financiers into lending funds for property investments.

Mr Feeley said that the Police had already undertaken a thorough preliminary investigation into the matter and it had been agreed between the two agencies that the SFO was better placed to conclude the inquiry.

“We are grateful to the Police for the good work they have already done on this matter, and their work should enable us to complete the investigation in a shorter time-frame.”

Mr Feeley said that the matter was not part of the SFO’s other investigations into the affairs of Blue Chip Financial Solutions Ltd.

“Investigations into Blue Chip Financial Solutions have concluded and an investigation report is under consideration. As part of this process we will be having discussions with Mr Paul Dale, the legal counsel for a number of Blue Chip investors. A decision on the transactions under investigation is expected to be made within the next few weeks.”

For further information

Adam Feeley
Chief Executive
Serious Fraud Office
Phone 021 333 539

Note to editors

Blue Chip Financial Solutions Limited (Blue Chip) was a property investment company, incorporated in 2000.  This company operated for eight years, including being listed on the NZX.  In 2008 Blue Chip changed its name to Northern Crest Investments Limited when many of the 55 associated companies in the group began being placed into receivership/ liquidation.

Many creditors lost their investments or were in a position where they had to settle on investment properties without being in a financial position to do so.  The previous Director of the SFO authorised an investigation into the companies in December 2008. The allegations investigated include:

  • Misuse of depositors/investors money
  • Fraudulently obtaining loan funding;
  • Forgery of sale and purchase agreements;
  • False accounting;
  • Fraudulent misrepresentations.

The role of the Serious Fraud Office

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates under two sets of investigative powers. Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”

Part 2 of the SFO Act provides the SFO with more extensive powers where: “..the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”

The SFO’s Statement of Intent 2010-2012 sets out the SFO’s three year strategy and goals for contributing towards the Government’s Justice and Economic Development goals. It is available online at,555/SFO_Statement_of_Intent_2010.pdf(external link)