Detail from the SFO website.
The Serious Fraud Office opened a probe into the dealings of failed minor lender Mutual Finance Ltd last week.
The white-collar crime investigator began its probe on December 23 after receiving information from the financier's receiver and the Ministry of Economic Development's National Enforcement Unit (NEU), according to the SFO
website.
"The director determined there was reason to suspect that an investigation into the affairs of Mutual Finance Ltd. and related companies may disclose serious or complex fraud," the website said. "SFO has commenced its investigation and is working closely with NEU and the Securities Commission to progress the investigation."
Mutual collapsed in July owing some 340 investors about $9.3 million, $9 million of which was covered by the government's retail deposit guarantee, while related failed lender Viaduct Capital Ltd. called in the receivers in May, owing 110 investors some $7.8 million, of which $7.5 million was guaranteed.
Viaduct's first receiver's report showed the finance company's recovery was being hindered by Mutual's failure. Bublitz's Mutual had prior ranking over Viaduct's securities in exchange for further funding in 'security sharing deeds', and receivers Boris van Delden and Iain McLennan of McDonald Vague questioned the legality of the transactions.
Bublitz's involvement with Viaduct got the firm thrown out of the government's guarantee scheme last year when the Treasury asserted it failed to comply with rules on related-party lending and didn't undertake due diligence on loans from Hunter Capital Group. The firm underwent a makeover under new management, though it retained ties with Bublitz through Mutual, which he was in the process of taking over.
Media-shy Bublitz exited Strategic Finance, a firm he helped found, when it was sold to Allco, and avoided the subsequent fall-out that's seen it end up in receivership.
Mutual's receivers Grant Graham and Brendon Gibson of KordaMentha weren't able to estimate the level of recovery in their September report, while Viaduct's van Delden and McLennan forecast a 28 cents-to-33 cents return in the dollar.
