A warning has been issued to investors, urging them to proceed with caution and conduct thorough research before engaging with Christchurch-based investment firm Chance Voight and its associated entities. This advisory comes amidst an ongoing investigation by the Financial Markets Authority (FMA), which has raised concerns about the firm's financial practices and the potential insolvency of its companies.
The FMA's investigation into Chance Voight Investment Corporation and its subsidiaries has been ongoing since earlier this month. The High Court in Christchurch has appointed PWC as interim liquidators, a move that has been linked to the FMA's concerns about the group's financial affairs and potential breaches of the Companies Act 1993 and the Financial Markets Conduct Act 2013.
Margot Gatland, the head of enforcement at the FMA, has advised investors to "fully inform themselves" before providing any further funds to Bernard Whimp, the businessman associated with Chance Voight. Gatland emphasized the importance of seeking independent legal and financial advice, especially in light of Whimp's recent communications with investors, where he has requested payments described as donations to cover legal expenses.
"The FMA considers there are reasons to believe the companies may be insolvent, and that their affairs may have been conducted in a manner that breaches the Companies Act. Additionally, there are concerns that Chance Voight group companies and Mr. Whimp, as their director, may have breached financial markets legislation," Gatland explained.
The FMA's investigation has led to the issuance of compulsory information request notices under the Financial Markets Authority Act 2011. However, the authority was not satisfied with the responses received, leading to the belief that the group may be insolvent and in breach of legislation.
The court will hear the FMA's liquidation application at a date yet to be confirmed. In the meantime, the FMA has also secured interim asset preservation orders against Whimp and Hanmer Equities, another subsidiary, to protect assets during the investigation. These orders prevent the movement of any money out of New Zealand.
Bernard Whimp, the businessman at the center of this controversy, rose to prominence in the 2010s for his practice of making off-market offers to buy shares from investors at below-market values. This practice, often referred to as "low ball" offers, led to a court case initiated by the Securities Commission at the time.
This ongoing investigation and the subsequent warnings to investors highlight the importance of due diligence and transparency in the investment sector. It serves as a reminder for investors to stay vigilant and seek professional advice when navigating complex financial matters.
What are your thoughts on this matter? Do you think investors should exercise caution in such situations, or is there a case to be made for a more balanced approach? We'd love to hear your opinions in the comments below!
