SFO closes investigation into PVL and CVL

Published

SFO closes investigation into Property Ventures Ltd. and Cashel Ventures Ltd.

The Serious Fraud Office (SFO) today announced that it was closing its investigation into Property Ventures Limited (PVL) and Cashel Ventures Limited (CVL) following allegations of financial misrepresentation, finding no basis for further investigation.

PVL was placed in receivership in March 2010 and CVL was placed in liquidation in December 2010. Both companies were associated with the development of Hotel So in Christchurch.

The SFO commenced its investigation into the matter on 23 May 2011.

SFO Chief Executive, Adam Feeley, said that the investigation had been commenced under Part 1 of the Serious Fraud Office Act to determine whether fraud may have been committed.

While the SFO was satisfied that the complaint was made in good faith and there was sufficient evidence to initiate an inquiry, there was no material evidence beyond the initial information to take the matter further.

“The SFO recognises the importance of every investigation coming to a timely conclusion. Where the initial evidence is not supported by further inquiries, the interests of justice demand that we do not prolong an investigation to the unreasonable detriment of any person.”

Mr Feeley said that its inquiries had included commissioning an independent report from Barry Jordan, a Partner (Recovery and Forensics) at Deloitte to advise whether the financial information disclosed warranted further investigation.

“Mr Jordan’s report identifies that, although there were discrepancies between financial information provided to the companies funding the Hotel So project and the final funding arrangements which actually occurred, there was no evidence of any criminality in this.  The evidence also did not indicate that the lenders were induced to make loans on the basis of any incorrect information.”

The SFO said that it had received full cooperation from all parties to the investigation which had enabled a speedy resolution of the matter.

For further information

Sarah Knowles
Media Liaison
Serious Fraud Office
Phone: 021 675 998

Note to editors

Background to Investigation

Property Ventures Ltd (PVL) and Cashel Ventures Ltd (CVL) were both associated with the development of Hotel So in Christchurch.PVL was placed in receivership in March 2010 and CVL was placed in liquidation in December 2010.

The SFO commenced its investigation under Part 1 of the Serious Fraud Office Act in May 2011 following allegations that both companies may have made misrepresentations to in order to secure funding.

Role of the SFO

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

The SFO operates three investigative teams:

  • Fraud Detection & Intelligence;
  • Financial Markets & Corporate Fraud; and
  • Fraud & Corruption.

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 2011-2014 sets out the SFO’s three year strategic goals and performance standards.  It is available online at: www.sfo.govt.nz