A former chief executive of Bluechip and director of Viaduct Capital Nick Wevers has died and criminal charges filed against him will now be withdrawn.
The Financial Markets Authority today revealed it had filed charges against Wevers and others associated with Viaduct Capital and Mutual Finance.
The market watchdog said it had filed charges under the Crimes Act and Companies Act against men associated with the companies. Both companies collapsed into receivership in 2010.
The FMA says that Wevers has passed away and that those charges are now being withdrawn.
A police spokeswoman said Wevers' death has been referred to the coroner. Police visited where he died in Remuera on Wednesday and are not treating the death as suspicious.
The Blue Chip group of companies failed in 2008 owing $84 million to investors, and founder Mark Bryers was fined $38,000 and sentenced to 75 hours' community work for bad record-keeping.
Wevers stepped down as chief executive of Blue Chip in 2004 after only seven months in the job.
The Crimes Act charges filed by the FMA carry maximum penalties of seven and 10 years' jail, while the Companies Act charge has a maximum sentence of five years' imprisonment or a $200,000 fine.
The FMA said it has charged former Strategic Finance founder Paul Bublitz, Bruce McKay, and Richard Blackwood for their roles at both Viaduct and Mutual, Lance Morrison for his role at Mutual and another person seeking name suppression. They are scheduled to appear in the Auckland District Court on May 7.
Mutual Finance collapsed in July 2010 owing about 340 investors about $9.3 million, $9 million of which was covered by the government's retail deposit guarantee. The Crown has been repaid about $1.8 million, with another $1.2 million in cash held by receivers Brendon Gibson and Grant Graham of KordaMentha which is subject to a dispute from another party, according to their latest report.
The financier's dealings were looked at by the Serious Fraud Office, which decided not to pursue a prosecution. It instead passed on information to the FMA over its relationship with related failed lender Viaduct Capital.
Viaduct called in the receivers two months before Mutual, owing 110 investors some $7.8 million, of which $7.5 million was guaranteed. Receivers Boris van Delden and Iain McLennan of McDonald Vague estimated a return to depositors of between 20 cents and 27 cents in the dollar, according to their last update in November.
Mutual had prior ranking over Viaduct's securities in exchange for further funding in `security sharing deeds', something receivers van Delden and McLennan sought legal advice over its validity, according to their first report in August 2010.
Viaduct fell foul of the government in 2009 when the Treasury asserted it failed to comply with rules on related-party lending and general business conduct by not undertaking due diligence on loans from Hunter Capital Group.
Hunter's Bublitz lent cash to Viaduct's shareholder, Phoenix Finance Holdings, after he had been engaged to source lending opportunities for the finance company. When the guarantee was stripped, the firm held about $14 million of deposits.
Viaduct's then-chief executive Nick Wevers subsequently quit the firm, and McKay and Blackwood took over the management. Bublitz went on to take full control of Mutual.
additional reporting: BusinessDesk