An interim liquidators’ report found its investors faced a “substantial shortfall” and had a negative net asset position of nearly $12 million.
On Monday, the High Court at Christchurch heard that the Chance Voight group was allegedly using new investor money for expenses.
“Records reviewed indicate that interest, and in some cases redemption payments to investors, were funded primarily through new investor funds,” said Richard May, counsel for the FMA.
As part of its forensic analysis, the FMA randomly selected two individual investors in Chance Voight’s mortgage investment fund, in order to trace where their investment deposits ended up.
“[Analysis of one investor] shows that of the deposit … a large proportion was used to…