The Serious Fraud Office (SFO) has launched an investigation into allegations of financial misrepresentation made against two companies who borrowed money from the collapsed South Canterbury Finance and Dominion Finance to develop Christchurch's Hotel So.
“At this stage, the focus of our investigation is simply to determine the nature of the funding advanced and the statements that were made in order to secure that funding,” SFO CEO Adam Feeley said.
Read the SFO's statement below:
The Serious Fraud Office (SFO) confirmed today that it is investigating allegations of financial misrepresentation made against Property Ventures Ltd (PVL) and Cashel Ventures Ltd (CVL).
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.
SFO Director, Adam Feeley, said that the agency had commenced its investigation under Part 1 of the Serious Fraud Office Act in response to allegations that both companies may have made misrepresentations to South Canterbury Finance (SCF) and Dominion Finance Group (DFG) in order to secure funding.
“Many of the finance companies under investigation by the SFO have been underpinned by major property development transactions that failed. These failed developments have had far-reaching consequences on those companies and our investigation into Property Ventures Ltd and Cashel Ventures Ltd is an example of one such instance."
“At this stage, the focus of our investigation is simply to determine the nature of the funding advanced and the statements that were made in order to secure that funding,” he said.
Mr Feeley noted that the February earthquake had created some difficulties in identifying the location and recoverability of some records.
“Our first priority will be to work with relevant parties, including the receivers and liquidators, to identify where pertinent records are held. In this regard we are fortunate to already have records from South Canterbury Finance and Dominion Finance Group which will enable us to identify any material inconsistencies between the funding and borrowing parties.”
(Update adds links to Property Ventures and Cashel Ventures' receivers reports).