The Serious Fraud Office (SFO) says it is now investigating Auckland-based finance company Clegg and Co Finance following its collapse last year.
The company, which had about $15 million of 500 investors' funds in debentures, went into receivership in October.
SFO director Grant Liddell said today the investigation was focusing on possible offending involving the amount of money the company was lending to related parties.
Liddell said Clegg and Co Finance's trust deed imposed a 5 per cent limit on such lending, but it appeared at the time of receivership that about three times that amount was lent.
He said breaching trust deeds could constitute an offence under the Crimes Act and was punishable by up to seven years in prison.
"This is the sixth finance company whose affairs are now under investigation by the Serious Fraud Office," Liddell said.
"These investigations are complex, and this one, like others, is likely to take substantial amount of time."
Clegg and Co investors were told by receivers BDO Spicers late last year that they would receive between 70c and 85c in the dollar of their principal back.