Blue Chip bosses' big bonuses

Blue Chip investor Jack Hoggard warned Bryers, employed as a consultant for Northern Crest, against running the business in the same way in Australia as had been done in New Zealand. "Those kangaroo eaters will do a hit on him. I don't want him taken out but I'd like to see him hurt badly," he said. "If someone was going to pour sulphuric acid on his nuts I wouldn't complain."

The New Zealand Herald
January 16, 2011

Blue Chip bosses' big bonuses
David Fisher

Jack_Hoggard_Blue_Chip.JPG

Jack Hoggard: 'If someone was going to pour sulphuric acid on his nuts I wouldn't complain'. Photo / Herald on Sunday

Blue Chip executives were paid bonuses with investors' money, according to documents that reveal the inner workings of the board.

Even two years before the collapse, the company had concerns it was out of cash and subject to the vagaries of managing director Mark Bryers.

The documents were released by the Ministry of Economic Development under the Official Information Act and detail the inquiry that led to Bryers being banned as a director.

The agency's National Enforcement Unit is the only state agency to extract any justice from the collapse of Blue Chip.

It has also successfully prosecuted Bryers on financial reporting charges.

The Serious Fraud Office has rejected any prosecution and the Commerce Commission told the Herald on Sunday this month that it had also stopped its investigation.

That means there are no investigations under way into the collapse that cost thousands of Kiwis and Australians their retirement funds.

Bryers has been bankrupted, owing $235 million.

The report shows that investigators at the unit reviewed board minutes and financial papers over the key period of the company's existence, during 2006-07.

The company finally went into liquidation in early 2008.

The papers show huge sums of cash simply disappeared as the company and its associated businesses used money, paid by investors for apartments, to fund the business.

When the company ran out of money, it bumped the investors on to new schemes which had yet to be created - and sold the apartments again.

In the end, there was not a single brick laid in the main developments touted by Blue Chip.

The report also quoted board minutes which said money raised by the company when it launched on the Australian sharemarket was used to prop up the business here - and to pay bonuses to executives.

The report stated Australian investors were promised that the money would be used to grow the business there.

Even as early as March 2006, the minutes recorded the company's problems paying bills and raised questions about Bryers' "conflicts of interest".

The minutes also showed that directors were aware that most of the debts had been covered by a personal guarantee from Bryers - although no one knew if he actually had any money.

The company documents said Bryers "sees himself as the company's spiritual leader/mentor".

However, investigators found "he appears uncertain and confused" with the details recorded at management meetings.

Meanwhile, Northern Crest Investments, the sole remaining entity from Blue Chip, is seeking a fresh listing with the Australian stock exchange after being suspended.

When asked about the Australian share money being used in New Zealand, an Australian Securities and Investments Commission spokeswoman said it was an offence to make "misleading or deceptive statements" when seeking cash from investors.

Blue Chip investor Jack Hoggard warned Bryers, employed as a consultant for Northern Crest, against running the business in the same way in Australia as had been done in New Zealand.

"Those kangaroo eaters will do a hit on him. I don't want him taken out but I'd like to see him hurt badly," he said.

"If someone was going to pour sulphuric acid on his nuts I wouldn't complain."

PLAYING THE PROPERTY GAME AGAIN
Blue Chip boss Mark Bryers appears set to make a new push into property development schemes in Australia.

His last surviving Blue Chip entity, Northern Crest Investments, continues to operate in Australia and is at the centre of new get-rich plans.

Blue Chip collapsed in 2008, costing thousands of people their retirement savings. Bryers, who styled himself as the company's "spiritual leader", was bankrupted owing $230 million.

Bryers then moved to Sydney and worked as a consultant to Northern Crest, earning $144,000 a year. Accounts from Northern Crest claim it has a new "licence agreement" with Rutherford Franchising to pull income from residential property investment.

The Herald on Sunday has found that Rutherford has been listing with Sydney-based employment agencies for "mortgage processors".

One of the advertisements carried the name Anderson Vago, a Sydney-based mortgage broker with links to Bryers' family.

When contacted, Vago at first described Bryers as a "consultant" for the company. He then said: "I'd prefer not to say anything about this."

Vago said he would pass on a message but Bryers didn't ring back.

In New Zealand, Blue Chip - run by Bryers - would sell investment properties which would be developed by other companies, also run by Bryers, under special "licence" agreements.

Blue Chip would be paid a finder's fee for getting investors and the development companies would receive commission for providing apartments.

Bryers clipped both tickets, no apartments were built and investors' money vanished into operating expenses.

By David Fisher | Email David

http://www.nzherald.co.nz/crime/news/article.cfm?c_id=30&objectid=10699911


Risks: Bankruptcy, Caveat emptor canard, Contracts seen as unenforceable or void, Costs of scandals, Conflict of interest, Corporate governance, Deadbeat systems exported oversees to the unsuspecting, False earnings claims, Follow the money: franchising re-distributes (not creates) wealth, Franchising practiced the same, worldwide, Franchisor corporation created to fail, Fraud, Lending is subject to expert fraud because it is a credence good service, Life savings gone, Loan pushing, Lost homes, Misrepresentations, Money swears, Ponzi (pyramid) scheme, Predatory franchise lending, Regulatory capture breeds its own incompetence, Sue the appraiser, Sue the bank, Related company transactions, Opportunism: self-interest with deceit, Undue influence, Veil of secrecy, Violence, Watchdog fails to bark, New Zealand, 20110116 Blue chip

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