The Serious Fraud Office (SFO) has decided not to proceed with investigation of the affairs of the Kiwi Finance Limited, effectively closing the file on the Company, unless the situation arises to reopen the case.
Kiwi Finance, which was accepting deposits from the public, went into receivership on April 15, 2008 owing about $1.7 million to 42 investors.
Following a Securities Commission referral, SFO Director Feeley determined that there were reasonable grounds to believe that an offence involving serious or complex fraud may have been committed.
Accordingly, the investigation commenced on November 1, 2010.
The SFO staff conducted the investigation with the help of external experts, the Securities Commission and the Receivers, focusing on a number of transactions entertained by Kiwi Finance, its parent company Kiwi Capital Limited and the shareholders of Kiwi Capital Limited.
Mr Feeley said that that there was ongoing collaboration between the SFO and the Securities Commission on this issue and that according to SFO there were better options available to regulators.
“Based on investigations to date, further inquiries could be warranted to determine whether there is sufficient evidence to support a prosecution.
“However, even if a criminal prosecution was warranted, it is not always the most effective outcome,” he said.
Mr Feeley said his Office had considered the circumstances surrounding the case against Kiwi Finance, including the scale and nature of the alleged conduct, and that the case was best suited to a civil or administrative remedy that provided some opportunity for compensation of the Kiwi Finance depositors.
“The Securities Commission has powers and functions that enable such an outcome, and this is a case which seems best suited to application of those powers,” he said.
But the decision of SFO was conditional on the Securities Commission being able to reach a satisfactory outcome.
“If, for any reason, the Commission is unable to reach a suitable resolution within a reasonable time, we will reassess our position and may reopen the investigation,” he said.
