22 May 2010

Apology too little, too late for Blue Chip investor

1:49 pm on 22 May 2010

A woman who lost her life savings in failed property investment company Blue Chip says the apology by company founder Mark Bryers is too little, too late.

The company collapsed in 2008, owing more than 2000 investors over more than $84 million.

Bryers was sentenced on Thursday on 34 charges, most relating to inadequate financial reporting under the Companies Act and the Financial Reporting Act.

He has been ordered to pay fines of $37,500 and serve 75 hours community service.

One investor, Linda Britton, believes the apology is insincere.

"For so many people, that have been hurting for so long, that have lost properties, people have ended up terminally ill, some have died - an apology just doesn't cut it."

Linda Britton says she does not believe Bryers will follow through on his latest promise, to set up a new scheme to compensate those who lost money.

Rotorua investor Ray Hawira, whose family lost almost $2 million in the collapse of the company, says the compensation promise is shallow and he won't believe it until he sees it.

He says for some people it is too late for compensation, as they are in the last years of their lives.

In a statement of apology reported in some media outlets, Bryers says he takes full responsibility for the company's failure.

He says he is not asking for forgiveness, but offers his unreserved and deepest apologies.

Bryers says he is distressed that former clients, some elderly, are being financially disadvantaged, have debt that they cannot service and are facing financial uncertainty.

He says his current financial situation is catastrophic, but he is setting up a scheme to financially compensate those former clients. Bryers says it will take time, but he will deliver on his promise.

Appeal possible

Mr Bryers' lawyer Aaron Lloyd is not ruling out an appeal against the sentence.

He argued in court that community work would be unjust because his client lives overseas.

The sentence fell well short of the maximum penalties, but the Ministry of Economic Development says it fits the severity of his offending.

The ministry says it appreciates that some people are disappointed with the outcome, but ultimately a person can only be charged with the offences they commit and Bryer's offending was not at the most serious end of the scale.

The Serious Fraud Office is still investigating Blue Chip.

Meanwhile, the Corrections Department says it still working through the details of how it will enforce the 75-hour community service sentence.

Because he lives in Sydney, some investors say he might get out of doing the community work.

PM comments

Prime Minister John Key says New Zealand investors are entitled to know they will be supported by the law if they are ripped off by failed finance company directors acting illegally.

Mr Key says while he cannot speak specifically about Bryers' case, the law needs to be looked at to ensure it is being properly enforced when directors act illegally.

He says investors need to accept there is an element of market risk in any investment but they are entitled to know the law will support them when someone rips them off.