Acting Business Editor for the NZ Herald

Deal over assets linked to director

Police agree one property will be forfeited to Crown but more-valuable rural lifestyle block will not be targeted

Douglas purchased a Whangaparaoa house using a $300k boat and funded the balance with a loan from BNZ. Photo / NZ Herald
Douglas purchased a Whangaparaoa house using a $300k boat and funded the balance with a loan from BNZ. Photo / NZ Herald

Police have cut a deal with the owners of properties linked to a failed finance company director, agreeing a cheaper one should be forfeited to the Crown and another almost three times the value not be targeted, court documents show.

Police last year took aim at assets they said were associated with jailed Capital + Merchant Finance directors Neal Nicholls and Wayne Douglas.

After an application brought by police last month in the High Court at Auckland, Justice Susan Thomas made a profit forfeiture order in connection with a Whangaparaoa property which Douglas bought in 2008 and had a capital value of $560,000 as of 2011.

Douglas, according to court documents, purchased this house using a $300,000 boat and funded the balance with a loan from BNZ. The property, the address of which is suppressed, was held in a trust.

An Official Assignee spokesperson said on Friday the property will now be marketed and sold. The proceeds will be used to pay off the $270,000 still owed to BNZ and remaining funds will be paid to the Crown.

Trustees and the registered owners of this property reached a settlement with police, court documents show.

But the settlement, approved by the High Court in April, also said that another property linked to Douglas with a capital value of $1.5 million should be removed from the scope of police restraining orders.

The rural lifestyle block north of Auckland was originally targeted by police along with the forfeited one.

In the proposal put to the court, lawyers for both sides said the settlement was consistent with the "overall interests of justice" and that litigation between the parties would be "time consuming, expensive and risky".

While police last year obtained restraining orders over Douglas' and Nicholls' leasehold interest in a Parnell property, court documents show this has been released because the value of the interests are unlikely to exceed amounts owing on mortgages taken out over them.

A lawyer representing the police told the High Court last month that a bank account with close to $1 million which was restrained last year is still frozen and not facing an application for forfeiture.

Nicholls is serving eight years six months in jail and Douglas eight years two months.

This followed a Serious Fraud Office trial where both men were found guilty of theft by a person in a special relationship for loans totalling almost $20 million. They were also sentenced for misleading investors.

C+M collapsed in 2007 owing $167 million to investors.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter


© Copyright 2016, NZME. Publishing Limited

Assembled by: (static) on production apcf04 at 06 Dec 2016 06:49:12 Processing Time: 1365ms