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A lifestyle of fast cars, foreign holidays and breast implants was enjoyed by a Northland-based foreign exchange dealer who is subject of official investigations into $1.2 million of investors' missing funds.
The dealer, Justin Hitchinson, 26, has left prominent Northland doctor and horse breeder Dirk Oberholster facing court
action from investors wanting to reclaim their cash.
The Serious Fraud Office is investigating failed FXHT Fund Managers Ltd while a liquidator's report raises serious questions about management of the business. Liquidator Peri Finnigan says Hitchinson switched the money entrusted to FXHT Fund Managers from Switzerland, where it was meant to be, to South Africa, where he previously lived. Then, according to the report filed with the Companies Office, he covered up losses in investors' accounts by switching cash from one to another.
Although Hitchinson told liquidators he had the authority to do so, none of the company's 10 investors backed him and there was no paperwork to support his claim. There has been no success in getting money back from South Africa.
Papers filed with the High Court in Whangarei by the liquidators state Hitchinson was being paid $127,000 a year - and billed the company for his lifestyle. Investors told the Herald on Sunday the business made no sense once they realised how much money was invested. With $1.2m from 10 investors being traded in foreign exchange, the return would have had to be huge to cover Hitchinson's salary and promised investor payouts.
Court documents show just eight months passed between Hitchinson being hired and FXHT Fund Managers Ltd going into liquidation - in that time he boosted his salary by $50,000 by claiming commission on trades, charged the company for an Auckland apartment and holidays in New Zealand and South Africa and bought a BMW convertible and a motorcycle.
Two investors spoken to by the Herald on Sunday said company accounts also showed he had an $18,000 fish tank, spent $12,000 on eye surgery and paid for breast implants for his former girlfriend. The investors had funded the liquidator to pursue his action because there is no money left in the company.
The court documents name Oberholster as the defendant, as he is the named director of the company and has responsibilities for its management. The claim states that during the period Oberholster was director there was no oversight of Hitchinson, no directors' meetings, accounts or management reports. The statement of claim says Oberholster allowed Hitchinson to switch the money to FXActive, the South African company holding the cash, without having proper agreements in place and without safeguards.
Oberholster, who came to New Zealand from South Africa, is a prominent figure in the racing community, a director and shareholder of Totara Park Thoroughbred Stud and a third-owner of the Paramount Medical Centre. He would not comment but his lawyer Tony Savage said the doctor had set Hitchinson up in business to help a former countryman.
"He could have walked away when he found out about Justin - but instead got him out of the business, relieved him of his shares and liquidated the company to help get back any money lost," Savage said. "He has also offered to help the liquidators in any way he can."
Attempts to contact Hitchinson were unsuccessful.
