Fourth director in Nathans Finance case believed to be in Ireland

By Maria Slade

Missing Nathans Finance director Mervyn Doolan is understood to be in Ireland, hampering efforts by authorities to bring him before the New Zealand courts on criminal charges.

Doolan and three co-directors of the failed finance company have been charged under the Securities Act for allegedly misleading investors by making untrue statements in the company's December 2006 registered prospectus and investment statement.

John Hotchin, Donald Young and Kenneth Moses - who is known as Roger Moses - appeared in the Auckland District Court on Friday to face the charges. However, Doolan has yet to be located and served with the required documentation.

The Herald understands he is in Ireland. This information was apparently a surprise to authorities who were contacted by the paper. They believed he was in Australia.

Meanwhile, the Ministry of Economic Development is understood to be considering whether to take action banning directors of Nathans Finance and its parent company VTL Group Limited from acting as directors of other companies. Such a ban could be in place for up to five years.

Various investigations are under way into the activities of the VTL group of companies.

The Serious Fraud Office is investigating Nathans Finance.

Four companies in the group are either in receivership or liquidation - VTL, Nathans, 24Seven Vending (Australia) and Chancery Finance. Little, if anything, is likely to be returned to investors.

"The reality is, given the size of the loss to investors, then the whole history of VTL is being investigated. We have made a number of complaints to authorities both here and in the US," receiver Colin McCloy, of PricewaterhouseCoopers, said.

The receivers were about to begin civil actions against several parties associated with Nathans and VTL with the aim of recovering funds, he said.

Nathans collapsed in August 2007 owing $174 million to 7000 investors. So far just 2.5c in the dollar has been repaid.

VTL was set up in 1997 as a vending machine operator and technology development company, and had operations in New Zealand, Australia, North America and Europe.

Nathans Finance was a 100 per cent subsidiary of VTL. It sourced funds from the New Zealand public and lent mostly to VTL and its subsidiaries.

Nathans director Moses and VTL director Gary Stevens escaped prosecution in 2001 when mortgage broker Reeves Moses Hudig was investigated for breaching contributory mortgage regulations. A mortgage broker was convicted and fined, but similar charges against Moses and Stevens were dismissed. The Companies Office unsuccessfully appealed against the dismissal.

- NZ Herald

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