SFO ruling no surprise, say Blue Chip investors

Barrister Paul Dale Photo / Brett Phibbs

The lack of justice for investors caught up in the Blue Chip saga was a "completely hopeless situation", but the SFO's decision not to prosecute the company would not have been totally unexpected to victims of the failed property group, barrister Paul Dale said.

Dale, who is acting for hundreds of Blue Chip investors, said any hope of seeing justice served now sat with the Court of Appeal and Supreme Court who have reserved judgement on two cases involving investors.

"I don't think the investors were expecting a great deal from the SFO investigation to be perfectly honest. The Blue Chip saga has gone on for a long time and nothing really constructive has happened from any of the regulatory authorities.

"It seemed to me the SFO got involved in this too late," he said.

The Serious Fraud office announced yesterday that it would not lay fraud charges against the Blue Chip group of companies, because of a lack of evidence.

In order to lay criminal charges there must be reasonable prospect, based on credible evidence, and that a jury could be satisfied a crime had been committed beyond reasonable doubt, SFO chief executive Adam Feeley said.

That evidential threshold had not been met, he said.

However the SFO is still investigating one of the group's South Island franchises and has today send a report to the Law Society detailing concerns the office has about the professional conduct of lawyers involved in Blue Chip.

"During the course of the investigation we observed some conduct which we believe was in breach of the code of ethics for the law society," Feeley said.

Jonathan Mathias was struck off the roll of barristers and solicitors in June, after admitting 13 misconduct charges for his part in advising investors in Mark Bryers' property investment company.

In July Zel Unkovich was ordered to pay two Blue Chip victims compensation for failing to advise them on the risks of the investment.

While Dale said he was hopeful of a good outcome for investors in the Court of Appeal and Supreme Court cases, however many of those caught up in the failed property investment scheme would never see justice served.

"In terms of their being any overall justice in terms of making those responsible for what occurred answerable, such as Bryers or the directors of Blue Chip, I think nothing is going to happen because the liquidators should have commenced proceedings long before now," he said.

Dale is awaiting the outcome of an appeal by Whangarei pensioners Judy and Bruce Bartle, who lost their case against finance company GE Custodians over loans made to them so they could invest in Blue Chip.

Dale said he was challenging the "enforceability of the mortgage".

"The other (case) involves about 300 or so investors where we have contended that agreements for sale and purchase are not enforceable," he said.

More than 3000 Kiwi investors lost more than $80 million when the Blue Chip group of companies collapsed.

Blue Chip founder Bryers has been bankrupted owing $230 million, banned as a director for five years and sentenced to 75 hours' community service on minor record-keeping charges.

"Mr Bryers must be laughing his head off now.

"I get asked once or twice a week what is happening to Mr Bryers and the answer is in real terms absolutely nothing."

A couple of corporate parking tickets for breaching the Financial Services Act but no culpability and living well. No wonder we have recidivists in New Zealand."

Dale said he planned on writing to Commerce Minister Simon Power outlining his concerns about the "appalling" lack of action by regulatory authorities involved in the case.