Hundreds of bookings cancelled: Securities Commission raises concerns over Marama Point Owners Ltd

By KELLY BLANCHARD in Rotorua
Hundreds of holiday makers will have their bookings at a Rotorua resort cancelled after the resort was warned it could be operating illegally.
The Securities Commission has written to Marama Point Owners Ltd raising concerns it was not complying with the Securities Act.
Kathryn Rogers, from the Securities Commission, said Marama Point Owners Ltd was allegedly operating Rotorua's Marama Resort without a prospectus and an investment statement, which were requirements under the Securities Act.
Ms Rogers said there were also issues about the way Marama Point Owners Ltd had collected about $2000 from each unit owner to buy shares in the company as well as concerns with its rental pooling scheme.
Ms Rogers said the alleged breaches of the Act meant the leases were nul and void, or did not legally exist, she said.
Marama Point Owners Ltd was now in the process of doing what it could to make sure it could operate within the law.
Scenic Circle Hotels, a Christchurch-based hotel management company, has now withdrawn from the resort and says it has no choice but to cancel hundreds of bookings it had taken.

Marama Point Owners Ltd has leases on 44 of the resort's 77 units. Those units were managed by Scenic Circle. The resort was promoted as the Scenic Circle Marama Resort Hotel, since August last year.
About 20 of the remaining units are operated as timeshares by another company. The remaining units are under private use as homes or holiday homes.
Scenic Circle's withdrawal comes after one of the unit's owners complained to the Securities Commission about the way Marama Point Owners Ltd was operating the lease pool.
Directors of Marama Point Owners Ltd contacted by the Daily Post did not want to comment because of possible legal action.
Scenic Circle Hotels executive director Lani Hagaman said in a statement her company was "bitterly disappointed" and the news came as an "unexpected blow".
"We entered this agreement last year on the understanding that all legal compliances for the resort had been met by Marama Point Owners Ltd."
Ms Hagaman said the hotel chain was now faced with having to inform hundreds of guests that their reservations at the resort must be cancelled.
"Never in our 20-year history have we been faced with a situation like this.
"We deeply regret having to cancel our guests' reservations, particularly just days out from the start of the peak holiday season, but we have no alternative.
"Given that we no longer have access to the minimum number of units we require to continue to operate the resort," she said in the statement.
It is the second time Scenic Circle Hotels has withdrawn from managing a property in Rotorua.
Princes Gate Hotel owners Brett and Vlasta Marvelly decided to manage their hotel again after a three-year break, during which time they contracted Scenic Circle Hotels to manage the inner city boutique-style hotel.
They asked the company to withdraw following a falling out.