SFO close NZF investigation

Published

SFO close NZF investigation

The Serious Fraud Office (SFO) confirmed today that an investigation into NZF Money Limited, and other related companies, has been closed.

NZF Money traded as a finance company and primarily provided commercial and residential loans. On 22 July 2011, the company was placed into receivership owing debenture holders approximately $16.4 million.

The SFO's investigation raised a number of questions relating to:

  • The adequacy of disclosure in NZF Money's prospectuses;
  • The propriety of the sale by NZF Money of NZF Homeloans Limited to NZF Group Limited;
  • The accuracy of the valuation of NZF Money's assets in the 2010 and 2011 financial statements.

Following a thorough analysis of all material obtained in relation to alleged suspicious transactions between members of the group, its directors and officers, the SFO determined that a Crimes Act prosecution could not be supported.

SFO Director, Julie Read said, "Despite questions being raised, our analysis has not disclosed sufficient evidence to bring a prosecution. However, we will be referring the matter to the Financial Markets Authority so that they may use the information obtained by the SFO in the course of their inquiry."

Julie Read said the SFO remains open to reconsider its decision if fresh evidence as to the actual knowledge and intent of those in control of the company becomes available.

The SFO acknowledge the assistance already received from FMA throughout the investigation, and will continue to provide information and assist them with their inquiries.

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

About 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's role is the detection, investigation and prosecution of serious or complex financial crime. The SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

  • business and investor confidence in our financial markets and economy
  • public confidence in our justice system and public service
  • New Zealand's international business reputation.

The SFO operates three investigative teams:

  • Evaluation and Intelligence;
  • Financial Markets and Corporate Fraud; and
  • Fraud and Corruption.

The SFO operates under two sets of investigative powers.

Part I 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 II 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 Annual Report 2013 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz