Regulators have finally stepped in to the Blue Chip debacle, with the Commerce Commission saying yesterday it would investigate whether property investment companie had used false or misleading information to entice investors.
The commission said it had received a large number of complaints from Blue Chip investors via
property consultant Olly Newland.
"The Commission's Fair Trading branch will investigate whether there has been any evidence of possible breaches of the Fair Trading Act," the commission said in a statement.
Newland, who has been working with disgruntled Blue Chip investors for several months, said the commission's move was "not a moment too early".
"I think this is the very first step in a long road towards resolving this fiasco. Hopefully, the evidence I've given them will produce some results."
Newland said his next target was the solicitors, financial advisers and accountants who had assisted investors into Blue Chip investments.
Newland believed that some Blue Chip investors were now seriously at risk of losing their homes.
Blue Chip or affiliated entities had now ceased making interest payments on deposits which payments were to be used to pay interest on mortgages raised against investors' homes for the purpose of purchasing investment properties via Blue Chip.
"That's why I've been pressing the Government to appoint a statutory manager - for the simple reason they have far greater powers than regular liquidators, and can freeze the situation for the benefit for the borrowers and investors until we get to the bottom of this before the first houses start going up for mortgagee sale."
Newland said the appointment of a statutory manager was up to Commerce Minister Lianne Dalziel who he sent relevant information to a couple of days ago.
"She has been given the information, so has everybody in Parliament, and whether they act on it is anyone's guess," he said.
