Newland steps in

Some investors claim that financially-crippled Blue Chip lured them by saying their deposits were covered by an insurance policy backed by Lloyds of London.

Property specialist Olly Newland alleges that Blue Chip claimed investors were each insured for up to $75,000 but that the policy "simply doesn't exist".

On Friday Newland complained to the Commerce Commission, alleging many Blue Chip investors had been encouraged to sink money into the company and its subsidiaries and associates on the basis of false and misleading information.

Barrister Paul Dale, who has acted for another group of Blue Chip investors, says a questionnaire his firm circulated also indicated several investors had been told about the "Lloyds connection" which had clearly been used to market the deals.

Newland has asked the government to put Blue Chip into statutory management, meaning all money held by the company would be frozen while a detailed investigation of the company was done. He acts for 20 to 30 Blue Chip investors, all of whom two to three years ago paid Blue Chip between $50,000 and $500,000 as deposits on properties that have not been built.

Most of these investors received interest on their deposits until September last year, when payments stopped. They have now discovered that, in many cases, their deposits millions of dollars were not held in trust accounts. They claim that the money now seems to have disappeared.

Many investors had mortgaged their homes to scratch together deposits on the yet-to-be-built apartments, flats and houses in the greater Auckland area and now face huge debts. Members of Newland's investor group have each paid him around $4700 for his services.

In addition to handling complaints about claims of non-existent properties, Newland says he is investigating allegations relating to the use of trust accounts, issues involving valuations and situations where owners say they paid for furniture packages that were never supplied. 

- © Fairfax NZ News