Capital + Merchant directors face SFO charges

The Serious Fraud Office (SFO) has arrested one current and one former director of Capital + Merchant Finance.

Neal Nicholls and Wayne Douglas face six charges under the Crimes Act involving nearly $14.5 million in loans made between 2002 and 2004 to three companies that converted two Palmerston North high rise office blocks into student accommodation.

When C+MF was placed into receivership in November 2007 the company owed $167.1 million to approximately 7,000 investors.

The SFO alleges that as directors of C+MF Nicholls and Douglas held investors' funds subject to a special relationship with investors, and that they used their position to apply those funds in a manner "inconsistent with that relationship."