Cooper deals were 'odious'
The Liquidator of one of Glenn William Cooper's companies has described the property deals which have left a number of poor South Auckland families in danger of losing their homes as "especially odious".
He has also sent a copy of his report to the Serious Fraud Office, which is investigating the deals.
Liquidator Robert Walker said stripping cash out of Holiday Homeshare made it impossible for the company to honour the guarantees to buy back properties from investors who paid "grossly inflated" prices.
That's an allegation Cooper denied to the Sunday Star-Times in a brief phone conversation on Friday.
Cooper has made headlines in recent months for deals where he bought properties, including units in a Taupo motel complex, and then resold them for much higher prices to investors, based on promises of a quick resale.
In one case, a unit bought for $245,000 was immediately onsold for $440,000 to an investor.
Some of those deals were with former Auckland Blues rugby player Kurtis Haiu, who has been charged with assaulting Cooper at a house in rural South Auckland that Cooper shared with his partner.
In his first report to creditors of Holiday Homeshare, of which Cooper was the only director, Walker said cash was stripped quickly as it came in from property sales.
Holiday Homeshare was the vehicle for buying Taupo motel units from Dorchester, which was mortgagee in possession of the motel complex. The units were then onsold to investors, with Cooper promising he would, in turn, sell them in quarter shares for a huge profit the investors could use to pay off the mortgages on their own homes.
If the quarter share plan failed, Holiday Homeshare guaranteed to buy the units back. However, Walker said cash was stripped from the company, meaning it was "dispossessed of its ability to honour such re-purchase agreements it had entered into".
The company was put into liquidation in June by one of the investors' whose buy-back guarantee was not honoured.
Walker said stripping the cash from the company appeared to breach section 380 of the Companies Act, which covers accepting credit which a company is in no position to repay.
"Any person who had arranged for the extraction of money in the way described either knew, or should have known, that to dispossess the Company in this way severely impaired its ability to fulfil its obligations," Walker wrote.
Cooper insisted that when the guarantees were made, the company was in a position to honour them, but when they were called on, the company was no longer in a position to do so.
"[Between] when the guarantees were made and when they were due to be honoured was a big time lag," Cooper said.
When asked why the proceeds of the sales were not left in the company to meet the guarantee should it be needed, Cooper said money was taken from the company for "expenses".
The relationship between Cooper and companies associated with him and the investors, many of whom Cooper was introduced to through church connections, quickly broke down.
The investors say they received little or no income, despite the units being rented out, and there is a tussle to remove KAW Holdings, a company related to Cooper, as the manager of the complex.
During the dispute, Walker says that Cooper took chattels including furniture from a number of units, claiming Holiday Homeshare owned them as they were not included in the sale and purchase agreements investors signed.
But in his report, Walker said that rationale was "spurious" because even if the unit-owners did not own the furniture, neither did Holiday Homeshare, as the chattels were not included in the sale and purchase agreements in which the company bought them from Dorchester.
Walker said civil action against Cooper on behalf of creditors would be "highly meritorious".
"The problem is likely to be that Cooper will plead poverty," he said.
The Serious Fraud Office was first called in by Westpac, one of three banks who lent Cooper's buyers the money to buy the units.
Last month, the SFO reopened its investigation into Cooper's property deals after the Star-Times revealed it had not interviewed a business associate of Cooper, who claimed to have evidence that could help its investigations.
Meanwhile, the fallout from the failed investments continues.
A Pacific Island community's marae in South Auckland has been put up for mortgagee sale by Christchurch lender Wroxton Finance following the collapse of a South Auckland property development deal associated with Cooper.
The Pukapuka Community headquarters in Canning Cres, Mangere, is up for mortgagee sale by Wroxton, which financed a development project masterminded by Cooper, with loans secured against the assets of the community.
The deal collapsed, leaving debts of $400,000.
- © Fairfax NZ News
What do you think the Govt should do with GST on new home builds?Related story: Call for no GST on new home builds