The money owed by the controversial Du Val Property Group has grown from $238m to $306m according to a new report.
The troubled Auckland property group comprised of 70 companies and entities, needs further extensive forensic investigating after its estimated debt grew to $306.3m, statutory managers PwC said.
The accountancy firm took over the running of Du Val in August after it was put under statutory management by Cabinet.
A PwC Statutory Managers’ First Report released in September showed Du Val was estimated to owe about $238m to creditors and investors.
But six months later a a second report released Friday put that figure around 30% higher.
The increase was in part because of funding allocated to try to finish some of the property developments, an increase in interest and fees owed, and new information revealed by accounting analysis, the report said.
The managers said they would continue to investigate Du Val’s dealings including transactions between the companies and owners, Kenyon and Charlotte Clarke.
There was a lack of documentation about goods paid for by Du Val entities that were then in the possession of the Clarkes, the report found.
The investors are unlikely to get much of that money back, it’s been revealed. (Source: 1News)
“The ownership of these assets remains unresolved. The Clarkes have advised that the relevant assets are variously owned by themselves personally, or the Clarke Trust, or both.
“The available documents indicate that is not the case. Our investigations suggest that many of the assets were paid for directly or indirectly by various Du Val Group entities,” the report said.
The Clarkes were also personally in receivership and most of those assets were now in the possession of the receivers.
There were also “significant concerns” about GST transactions, the report said.
Information was limited because PwC had not been able to interview everyone of interest and important accounting records were missing, the report said.
“The Du Val Group’s accounting records are materially incomplete, with a large volume of related party transactions, requiring extensive further forensic accounting analysis,” it said.
PwC said it was important to note that investigations were still underway.
“We cannot yet confirm the outcome… including what, if any, formal action may be appropriate,” the report said.
PwC also updated what was done with the assets which included property developments that were never finished.
Some were sold off, some entities were kept running, and flood-damaged homes were being fixed.
The cost of employing PwC as statutory managers was $1.6m.
In March, the government advanced $1.04m to cover some costs, but that was likely to be repaid later once assets were sold.
Companies can only be put into Statutory Management by the government, and it is rare.
When making the order in August, Commerce Minister Andrew Bayly said Du Val had significant liabilities and its position was so complex and large that immediate intervention was required to prevent broader harm.
“Statutory management is the option of last resort,” Bayly said at the time.
The Financial Markets Authority issued a formal warning against Du Val Capital Partners – the investment arm of Du Val in 2023 – for potentially misleading or deceiving investors.
Du Val was the first company to be put in Statutory Management since South Canterbury Finance about 14 years ago.
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