Top businessman considered giving Papples $10m

By KELLY BLANCHARD in Rotorua
A former Auckland businessman has admitted considering investing $10 million in Rotorua-based money-making schemes alleged to be fraudulent.

Paul Hyslop hit national headlines four years ago when he was investigated for insider trading in Fletcher Challenge shares.

He was also one of three directors of public company Wilson Neill fined for breaches of the Companies Act.

Now a vending Machine company director in Los Angeles, Mr Hyslop told the Rotorua District Court yesterday about his involvement in schemes run by Rotorua couple Bill and Lee Papple and their Australian business partner, Tina West.

The Papples and Ms West are facing six fraud-related charges, brought by the Serious Fraud Office, over high-yield investment schemes alleged to have lured more than $14 million from investors throughout New Zealand.

Mr Hyslop told the court he was introduced to the schemes in early 2002 by a relative of Ms West's, Auckland businessman Lloyd Johns.

He said he had heard of such investments but never ones where the principal sum was guaranteed. He was told of returns of about 50 percent a month and went on to invest a total of $100,000 in two separate instalments.

He never got any interest and on two occasions asked for some of his principal back, totalling $37,500. The first request was in June 2002.

He said whenever he asked where his interest was, he would be told of hold-ups with overseas trades.

Despite being nervous about the investment, Mr Hyslop met with the Papples to discuss the possibility of investing $10 million.

After meeting in Auckland and in Rotorua to discuss the deal, he never went ahead with it because he could not get "enough comfort" about his original sum being secure.

He told the court he was impressed with Mrs Papple and Ms West.

Mrs Papple had told him she had a background in banking and insurance and had spent time overseas.However, he was not impressed with Mr Papple, who did not appear to have financial experience. Mr Hyslop said he got the impression investors were lucky to be asked by the Papples and Ms West to be part of the investments.

"It was more just for friends and relatives and friends of friends who they could trust."

After the Papples and Ms West's companies went into liquidation at the end of 2002, Mr Hyslop and a friend met with the Papples at the offices of the Hanover Group in Auckland.

Mr Hyslop said he was "aggressive" towards the couple after reading the liquidators' report that said the Papples had spent investors' money on items such as houses for themselves and their son.

"I was fairly aggressive towards them because I felt that we had been lied to."

Bruce Tarrant, a company director from Matamata, and Darcy Sharplin, a former Westpac bank Rotorua branch manager, also gave evidence yesterday.

Another investor who gave evidence yesterday was granted final name suppression after none of the lawyers representing the Serious Fraud Office, the Papples or Ms West objected.