Court action against commissioner over investment adviser role

Court proceedings have been filed against Commerce Commission member Donal Curtin over his role as an investment adviser.

Two legal actions are being taken against Mr Curtin regarding his role as the leader of defunct financial advisory firm Vestar's investment panel. A year ago, Mr Curtin stood down as commission deputy chairman, but he remains a commissioner.

Some clients of Vestar are seeking compensation for big losses after Vestar invested money in related party finance companies OPI Pacific Finance and Boston Finance, which later collapsed. Vestar also invested in Property Finance Securities, Capital + Merchant, Bridgecorp and other finance companies that also later collapsed.

The commission said yesterday it had been advised that court proceedings had been filed in Taranaki against Mr Curtin, relating to his private role as an investment adviser.

The action in New Plymouth was on top of proceedings filed in the High Court in Auckland last year on similar matters, and was issued by private parties, the commission said.

In the middle of last year, a former Taranaki client of Vestar sought to include Vestar's professional indemnity insurer QBE in a civil case against Vestar for unspecified damages, but the court has ruled that out.

New Plymouth firm Dennis King Law lawyer Karen Towt said seven sets of proceedings were served last week and an application had been made to have all proceedings heard in the High Court. The action is being taken by family trusts against Vestar directors and members of the investment committee including Mr Curtin, Kelvin Syms and Simon Purvis.

No damages figure had been decided yet, she said. None of the defences had been filed, and it was unclear if the individuals would have personal insurance against such claims. Ms Towt said the case was in its early stages, but she hoped for a hearing within months.

The other action seeking damages against Vestar directors Mr Syms, Mr Purvis and Mr Curtin has been filed by barrister Lawrence Herzog with the High Court in Auckland. Mr Herzog could not be contacted yesterday, but Ms Towt said that case was not directly related to the Taranaki case.

If the test cases succeed, technically other Vestar clients who lost money could also take their claims to court.

The Commerce Commission said until all of the proceedings were resolved, Mr Curtin had been given tasks that did not involve him in decision-making related to enforcement actions under either the Fair Trading Act or Credit Contracts and Consumer Finance Act, the commission said.

"Other steps are being taken to ensure that conflicts of interest will not arise."

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