Investors may lose thousands of dollars

Press, 25 July 1986, Page 4

Investors may lose thousands of dollars

PA Hamilton Many Waikato people may lose thousands of dollars invested in contributory mortgages through a failed Auckland-based nominee company which has been investigated by the Auckland corporate fraud unit, says the Official Assignee at Hamilton, Mr Les Currie. The liquidator of Francis James Nominees, Ltd, Mr Currie said yesterday not to expect “substantial recovery” of about $1.7 million invested through the company in 11 investments. Mr Currie said these investments were considered “to be doubtful in that substantial recovery of money invested by the investors is not expected.” He said partial or full recovery of funds in 13 other investments worth about $613,000 was expected.

Mr Currie said he was taking steps to ensure that the 274 or so investors involved, three-quarters of whom were in Waikato and South Auckland, were fully protected. Arrangements were being made for the collection of outstanding mortgage debts and detailed investigations were being made into the workings of the company.

He said the directors of Francis James Nominees, Ltd, had passed a resolution to wind up the company .on July 8 after an investigation into its affairs by the Auckland corporate fraud unit, part of the Justice Department. Mr Currie said the unit’s investigation had been completed but he declined to say what, if any, action would follow.

“The liquidator has obtained a preliminary legal opinion as to alternatives available to investors for recovery of their money.”

These alternatives and details of his investigation would be put to meetings of investors to be held within the next two weeks, he said. Mr Currie said Francis James Nominees acted as an investment vehicle through which investors placed money with brokers who in turn invested it in securities obtained by the company in the form of contributory mortgages. Of the investors, most were individuals, many of them middle-aged. They had invested sums ranging from $lOOO to $lOO,OOO. While most were in Waikato and South Auckland, investors throughout New Zealand

and several in Australia and Papua New Guinea were involved.

His office had already been approached by between 40 and 50 investors, many of them upset about what had happened. Because his investigations into the company were still continuing and the legal issues involved were complex, he could not release any further Information until meetings of investors were held.

Companies Office files list the directors of Francis James Nominees as Lyall James Porter, company director, of Hamilton, and John Joseph Lynch, company director, of Auckland. They are the only shareholders, each holding 500 shares.