Capital+Merchant went into receivership in November 2007 owing $167m to about 7500 investors. No funds are expected to be recovered. Photo / Jason Dorday
Capital+Merchant went into receivership in November 2007 owing $167m to about 7500 investors. No funds are expected to be recovered. Photo / Jason Dorday
Three former Capital + Mechant directors have been found guilty on some of the charges they faced, but acquitted of others.
Two sets of charges were laid against former Capital + Merchant directors.
In the first set charges - of which they were found not guilty - former directorsNeal Medhurst Nicholls and Wayne Leslie Douglas were accused of three counts of theft by a person in a special relationship and the publishing of false statements. Some of the charges carried a maximum penalty of 10 years' jail.
The pair's case concerned allegedly related-party loans of about $14.5 million made to three companies that converted two run-down Palmerston North office blocks into student accommodation, a project called "the Hub".
The Crown argued the pair stood to benefit from these related-party loans but failed to disclose them in a Capital+Merchant prospectus and knew they breached the company's trust deed.
In the second set of charges, former Capital + Merchant chief executive Owen Tallentire and Nicholls faced four charges each for theft by a person in a special relationship.
Douglas faced three of these charges, which alleged that the accused knowingly used investors funds in a way other than in accordance with the Capital + Merchant's trust deed.
In this second set of charges, Douglas and Nicholls were found guilty on three of them and Tallentire on two.
