Fraud probe into Bay man's firms

LAWRENCE GULLERY
A Central Hawke's Bay man is at the centre of a Serious Fraud Investigation after two Waipawa finance companies were placed into voluntary liquidation this week leaving rural investors wondering if they will see their money again.
Among the investors were Kathie and John Hands who had $312,000 at stake, money they put away as a fund to help their granddaughter, Matisse Reid's recovery from an organ transplant she was waiting for in the US.
The Serious Fraud Office confirmed it was investigating a "case of substantial fraud" in Hawke's Bay concerning businessman Warren Pickett and his companies, Waipawa Holdings and Waipawa Finance Company Limited.
Central Hawke's Bay Mayor, Trish Giddens, said she was shocked to hear Mr Pickett was being investigated. She had heard investors in his companies ranged from people ready to retire to others who had set up funds for their grandchildren's future.
"I think it will have a huge impact on the community, a lot of people had money in those companies. He [Mr Pickett] was an outstanding member of the community, I've worked with his wife before, it's taken everyone by surprise," Mrs Giddens said.
The director and chief executive of the Serious Fraud Office, Grant Liddell, said he could not confirm how many clients had invested in the two companies and how much money was at stake until later in the investigation.
Mr Liddell said Mr Pickett had been co-operating with investigators who had taken financial records and a computer to Auckland for analysis.
Mr Pickett wrote to his investors earlier this week informing he had put a freeze on depositors funds "due to an unprecedented level of withdrawal requests over the past two weeks".
The letter also said: "Once the position with the Company has been evaluated depositors will be provided with a full report."
At that stage he said he anticipated that would come within seven to 10 days.
Mr Pickett's lawyer, Jonathan Krebs, confirmed two finance companies owned and operated by Mr Pickett had been placed into voluntary liquidation.
"John Palairet and Graham Edwards have been appointed liquidators," Mr Krebs said in a statement. "It is hoped that a creditors meeting will be held towards the end of next week."
Mr Krebs said the Serious Fraud Office had advised its investigation could take up to a month.
He said the scope of the investigation was confined to the operations of the two finance companies and not a separate accounting practice of Warren Pickett and Associates, in Waipawa.
But Mr Krebs said negotiations were under way with another accountancy firm to transfer the practice within the next few days and clients of the accountancy firm would be advised directly.
Mr Pickett's accountancy firm's office had its blinds closed yesterday and a sign which said the office was closed until further notice. Hawke's Bay Today approached staff to ask to speak to Mr Pickett but he declined, referring the newspaper to the statement released by his lawyer.