On Monday, BusinessDesk is launching a new podcast series called The Fall of the House of Du Val that investigates the events leading up to the raid on the Clarkes’ home, and what has happened since.
Host of the series, investigative journalist Maria Slade, told The Front Page podcast that while property developer collapses are not unique, the Du Val saga stands apart. This is largely because it triggered one of the rarest interventions in our business landscape.
“The big thing is that they’re in statutory management and a lot of Kiwis won’t know what that is,” she says.
“It’s a very rarely used tool.”
The last comparable use was the implosion of South Canterbury Finance 15 years ago.
Slade describes statutory management as the Government stepping in and effectively taking over a business when the situation is too complex or wide-reaching to leave to normal processes.
“There are a lot of professionals out there, accountants, lawyers, who’ve never seen it in their careers. You know, it’s like a unicorn.”
Du Val’s complex internal structure only heightened the sense of scale.
“There are 70 entities that are in statutory management,” Slade says.
PWC is now tasked with unravelling the group while the Financial Markets Authority runs a parallel investigation.
To date, no charges have been laid, but the losses already identified are significant.
“$268 million lost is the estimate at the moment. A lot of investors who’ve lost money, tradies that are out of pocket, the IRD’s out of pocket.”
The collapse also highlights a wider issue Slade believes New Zealanders need to confront.
Du Val grew during a booming property market that encouraged a wave of unregulated wholesale investments advertised to everyday buyers. These products are meant for experienced or high net-worth investors, yet Slade says the Du Val group operated far beyond that niche.
“They were offering what’s known as wholesale investments, which are unregulated ... and the Financial Markets Authority was really concerned that it was being abused.”
For Slade, the Du Val story is story about more than one company. It’s a warning about the environment that allows speculative products to be offered to inexperienced investors.
“They were just ordinary mums and dads, and they shouldn’t have been taking on such high-risk investments.”
Listen to the full episode to hear more on:
- The Clarkes’ approach to self-promotion and the role this played in Du Val’s strategy;
- Who has come forward to share their experience with the Du Val group in the series;
- The article Slade wrote that first brought the Du Val group to public attention.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
