Property developer's dealings under scrutiny
Bankrupted property developer Jamie Peters is to face a public examination of his financial affairs in the High Court, after the Official Assignee refused to automatically discharge him from bankruptcy after three years.
Peters was one of the country's highest flying property developers during the last property boom and, at its peak, his empire included the sprawling Gulf Harbour housing development north of Auckland, a 2.8ha commercial development site behind Victoria Park Markets on the fringe of Auckland's CBD, as well as several high-rise office buildings in Auckland.
Peters also had a fast-paced lifestyle that reflected the growth of his business and his toys included a South Island high country hunting lodge and his own motor racing team.
But his companies collapsed under the weight of their debts following the global financial crisis and in 2009 Peters was bankrupted owing creditors an eye-watering $181 million.
However, his bankruptcy was controversial because shortly before he was bankrupted, many of his assets were transferred to companies that were in turn owned by a nominee company controlled by the same law firm that handled much of Peters' legal work.
The directors of those companies were business associates of Peters.
That meant the ultimate beneficial ownership of the assets, some of which produced valuable income streams, was shrouded in mystery and the transfer of the assets became the subject of a long-running investigation by the Insolvency and Trustee Service.
At the beginning of last year the Serious Fraud Office launched an investigation into Gulf Corporation, a company in which Peters was the former owner and director.
The company had played a central role in Peters' development of Gulf Harbour before being placed in receivership in December 2009.
Gulf Corp was owed a GST refund of approximately $1m which related to a cancelled sales contract on land at Gulf Harbour and the receivers laid a complaint with the SFO relating to the disbursement of the refund.
According to the SFO, "the receivers alleged that they had been induced by deception into entering into an arrangement whereby a third party [allegedly related to Peters] received the majority of the GST refund".
They believed the company's creditors should have received the money.
The SFO closed that investigation last month after concluding "there was insufficient grounds to support a criminal prosecution against any identifiable individual".
However, in the course of its investigation the SFO is also understood to have uncovered information about Peters' financial affairs which was of interest to this Official Assignee and passed that information on to his office.
Two days in June have been set aside for the High Court examination and the judge who will preside over the case is likely to have much to consider.
As well as the information provided to the Official Assignee by the SFO, the Insolvency and Trustee Service's own investigation is believed to have uncovered records of bank accounts nominally under the control of a third party which could have a bearing on whether or not Peters is discharged.
When contacted by the Sunday Star-Times last week, Peters said he was unaware that the SFO had concluded its investigation into Gulf Corporation but confirmed he had been pushing to be released from bankruptcy.
When asked if he was hopeful that he would be discharged after the public examination in the High Court he replied, "I wouldn't even know, to be honest."
Sunday Star Times