By Tony Field
Two directors and a former chief executive of Capital and Merchant Finance have been found guilty of fraud.
Neal Nicholls, Wayne Douglas and Owen Tallentire have all been denied bail until they are sentenced next month, but all three were found not guilty on some of the charges.
A total of 7500 investors trusted the directors of Capital and Merchant Finance with their money and Serious Fraud Office chief executive Adam Feeley says that trust was betrayed.
“This was a deeply cynical company run by deeply cynical people,” says Mr Feeley.
Capital and Merchant went into receivership in 2007, owing $167 million.
Neal Nicholls, Wayne Douglas and Owen Tallentire were found guilty of some charges relating to loans made between 2004 and 2006. Investors didn't know trusts associated with the three would benefit from the loans.
“I don't see in the faces of the investors a satisfaction, there is a deep wariness after this passage of time, there has been an absolute shock that they have lost money in the scale that they have done,” says prosecution lawyer Nicholas Davidson QC.
The Serious Fraud Office is scathing about the way the company was run - saying its accounting and legal transactions were complex - and its property valuations too optimistic.
“Those three problems combined to make this a very big failure and a very bad failure,” says Mr Feeley.
Justice Wylie denied the men bail.
“While I have indicated that a prison sentence is likely that does not mean it is inevitable,” says Justice Wylie.
They will be sentenced at the end of next month.
The decision to trust Capital and Merchant with their savings has turned out to be a disaster for investors and it's not expected that they will recover any of their money.
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