Investors promised a lucrative slice of Colombian goldmining action appear to have been left empty-handed after a company that raised nearly $2 million from mum and dad investors collapsed revealing it held no assets or mining licences.
Infratech Mining, directed by former bankrupt Bob Cottle, was placed into liquidation by the High Court in Nelson in June.
The first report prepared by the Official assignee showed $1.9m had been raised from shareholders - mostly residents of the Nelson area, according to company records -and amid total claims by creditors of $4.3m.
Creditors and shareholders are likely to face total wipeout with the Official Assignee reporting Cottle had "confirmed the company had no assets and that it had no gold mines or mining licences in Colombia".
The court action was brought by investor Lindsay Newton who sought the repayment of a $200,000 loan. In his decision liquidating the company, Associate Judge John Matthews recounted his questioning of Cottle over the claimed rights to gold mines in Colombia.
"When pressed on how this asset has any actual value, or could be realised, Mr Cottle was without explanation," Associate Judge Matthews wrote.
Once he had a chance to put it before the judge, he had nothing to say. It was bullshit from day one.
Newton told the Herald he had advanced what was supposed to be a short-term loan to Infratech, but was repeatedly fobbed off when seeking repayment from Cottle - who was also a tenant in one of his buildings.
"It turned to custard quite quickly," he said.
Newton said the likely lack of returns for him, and other shareholders, was disappointing but not unexpected and he felt vindicated by the ruling. "Once he had a chance to put it before the judge, he had nothing to say. It was bullshit from day one," he said.
Cottle rejected doubts over the existence of the mining licences. "If there were no licences I'd be in jail," he said.
Cottle said while Infratech didn't "physically" own the mining licences, deals had been signed to assign them to the company's branch in Colombia. With Infratech Mining's liquidation these deals had now lapsed.
Cottle blamed Newton for bringing the whole enterprise crashing down and said other shareholders still support him and he would prefer to maintain a low profile. "I would beg you not to put any of this in the paper," he told the Herald.
Infratech Mining had been formed in 2009, days after Cottle emerged from his first bankruptcy. Pitch documents used by Cottle to raise funds from investors, and obtained by the New Zealand Herald, claim the venture could produce returns of up to 1000 per cent to investors.
If there were no licenses I'd be in jail.
The presentation, intended to raise up to $9 million in shareholder capital, claimed the company would soon produce 428,000 ounces of gold annually resulting in profits of more than $100m.
Newton said he had been disappointed the complaints he had made about Infratech to the Police, the Commerce Commission, the Serious Fraud Office and the Financial Markets Authority were not acted on earlier.
"It seems there's no government department that [businessmen] like this are answerable to."
The FMA had earlier raided the company's offices and issued a warning late last year "about Infratech's purported ownership of mining licences and about inconsistent statements that the company has made about these licences".
The collapse is the latest - and probably final - chapter in the troubled tale of Infratech Mining. Financial statements filed with the Companies Office reveal Cottle had likely fallen victim to advance fee scammers, with $233,122 paid to a company called Green Energy Capital One.
Cottle has also acknowledged entering into separate - and unfruitful - business discussions to fund Infratech Mining with two convicted fraudsters, the self-styled Australian knight "Sir" Robert Cowley and the Utah-based Pete Buffo.
Prior to his pursuit of precious metals in South America, Cottle had - according to an Employment Relations Authority decision from 2005 - claimed to have contracts from the Estonian government to manufacture railway sleepers.