No fraud found say liquidators

Blue Chip liquidator Jeff Meltzer. Photo / Herald on Sunday

Blue Chip liquidator Jeff Meltzer says he's seen no evidence of fraud during his investigations into the collapse of the property investment group.

Meltzer and his colleagues are due to release a report explaining how they may pursue claims of up to $42 million against directors of Blue Chip companies.

He has three funders standing by to review evidence of possible reckless trading and other Companies Act breaches, with a view to backing legal action.

But theft of funds was not in the picture.

"Please don't think that we are looking at anything fraudulent here.

"That's different from reckless and all those sorts of issues.

"Believe me if we found anything like that we would go straight to [the Serious Fraud Office]."

But barrister Paul Dale, who has gone to court on behalf of burnt Blue Chip investors, says he is "continuously surprised" by the liquidators' position.

His team had undertaken a lot of investigation into Blue Chip over the course of its work, he said.

"The liquidators haven't asked us for any real assistance or input on any of this.

"The evidence we've uncovered suggests that there has been criminal behaviour. I've seen evidence of agreements signed by [former Blue Chip boss Mark] Bryers that seem to me were intended to mislead a funder into believing there were valid pre-sales [of apartments].

"We know that the three main developments, St Martins Lane, Emily Place, and Turner Street were all presold to investors and then the land subsequently onsold to innocent developers."

It was now more than two years since Blue Chip collapsed, owing around 2000 small investors at least $80 million.

"The time has come for some serious action to be taken which includes, I would have thought, serious criminal prosecutions."

However, the two men do appear to agree that directors of some of the 50-plus Blue Chip-related companies may have a case to answer.

Blue Chip directors have included such high profile names as former MPs Wyatt Creech and John Luxton, and lawyer Jock Irvine.

Asked if those potentially in the gun would have insurance, Meltzer answered: "I would hope so".

It had to be remembered, however, that there were layers of subsidiary companies. The publicly listed Blue Chip itself did not sell the investment products.

Last month Bryers pleaded guilty to 31 charges brought by the Ministry of Economic Development but is unlikely to face a jail term.

The Serious Fraud Office has been investigating Blue Chip since early 2008. It has not yet laid any charges.

Dale succeeded with High Court litigation against a lawyer who advised dozens of Blue Chip investors, but failed on two other actions. Both cases are before the Court of Appeal.

Meltzer said there was no guarantee that the litigation funders would back any action. However the liquidators could also try for help from government circles.

His upcoming report would include estimates of funds required. "Let's be honest, it won't be an insignificant sum."