Blue Chip probed

Property consultant Ollie Newland believes the Commerce Commission's decision to investigate whether Blue Chip breached the Fair Trading Act is the first step in recovering millions of dollars owed to 30 investors he represents.

Blue Chip brochures and letters to investors had claimed they were each insured for up to $75,000, but the policies supposedly backed by QBE Insurance and Lloyd's of London did not exist, he said. The claims had clearly been used to help market Blue Chip products.

The complaints made last week to the commission were on behalf of about 30 investors who made deposits on properties totalling $4 million to $5m.

Nineteen companies linked to the New Zealand franchise business of Blue Chip were put in liquidation last week. About 4000 investorsbought more than 2000 properties through Blue Chip-related companies.

Newland said most of his clients found deposits they had made were not held in trust accounts. Many had mortgaged their homes to get the deposits on yet-to-be built apartments and houses and are trying to manage huge debts, he said.

- © Fairfax NZ News