The Serious Fraud Office will appeal against the not guilty verdicts of two former directors of failed lender Capital + Merchant Finance involving a Palmerston North development known as "The Hub Properties".

In July, Neal Nicholls and Wayne Douglas were found not guilty of charges under the Crimes Act of theft by a person in a special relationship and one of making a false statement as a promoter.

The charges involved $14.4 million of related-party lending on the Palmerston North development.

"There are important points of law that have significance not only to this case but also the ongoing finance company prosecution," SFO chief executive Adam Feeley said.


The decision to appeal had not been taken lightly, he said.

At a second trial, the directors, together with the finance company's chief executive, Owen Tallentire, were found guilty on charges involving fraudulent transactions valued at about $28 million which occurred between 2004 and 2006.

Capital + Merchant went into receivership in November 2007 and owes $190 million to about 7000 investors.

It went into liquidation in December 2009.

None of the $190 million was recovered.

Nicholls and Douglas will appear for sentencing in relation to the second trial on August 31.