C+M civil action dropped by FMA

Around 7,000 Capital + Merchant investors were owed around $167 million when it went into receivership in 2007. Photo / Jason Dorday

Parked civil action against convicted directors of Capital+Merchant Finance has been dropped by the Financial Markets Authority, which says there was little chance of recovering money for investors.

The civil action was filed against four of C+M's directors in 2009, the same time the Securities Commission charged the men and another director for misleading investors, who were owed $167 million when the company collapsed in 2007.

The five facing these Securities Commission's charges - Neal Nicholls, Owen Tallentire, Colin Ryan, Wayne Douglas and Robert Sutherland - pleaded guilty to them in 2013.

Nicholls, Douglas and Tallentire had already been found guilty in a Serious Fraud Office case and jailed for theft charges.

Nicholls and Douglas was sentenced to eight years, six months and eight years, two months in jail respectively for the offending in both cases.

Tallentire got six years in jail while Sutherland and Ryan were sentenced to home detention, community work and ordered to pay reparations.

The FMA, the Securities Commission's successor, announced today that it was discontinuing the civil action.

This followed C+M's liquidator settling civil action against the company's auditors last year for $18.5 million.

It was also in light of the company's receivers issuing action against its former trustee.

"The FMA has determined that in light of the outcome of the criminal proceedings, the actions taken by the receivers and liquidators, and the limited personal assets of the directors, there would be little prospect of any recovery for investors if it were to pursue its civil claim," the regulator said today.

"The FMA considers that the misconduct that was the subject of the civil proceedings has been adequately addressed through the criminal process and the further time and cost of pursing the civil proceeding would not be justified or in the public interest."