SFO closes NZF Money investigation

02:00, Nov 28 2013

The Serious Fraud Office has closed its investigation into NZF Money citing a lack of evidence to prosecute, but referred the matter to the Financial Markets Authority for further inquiry.

NZF Money traded as a finance company but collapsed in July 2011 owing debenture holders $16.4 million.

In a statement the SFO said their investigation "raised a number of questions" over whether NZF Money's prospectus contained adequate disclosure and whether the company's assets were properly valued in financial statements.

The "propriety" of a specific transaction in 2011, where mortgage subsidiary NZF Homeloans was sold by the finance company to its NZX-listed parent NZF Group parent for only $1000, was also questioned by the SFO.

The receiver of NZF Money this year settled a legal claim against the finance company's parent with NZF paying nearly $1m and the directors an undisclosed sum.

SFO director Julie Read said: "Despite questions being raised, our analysis has not disclosed sufficient evidence to bring a prosecution. However, we will be referring the matter to the Financial Markets Authority so that they may use the information obtained by the SFO in the course of their inquiry."

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Fairfax Media